Letter of continuing security

 

(Querist)
08 January 2019

Sir,
Bank ask my company to pay stamp duty on letter of continuing security relating to the CC limit, my query is only about is it necessary to pay stamp duty on letter of security because I ask other banks they said Rs. 500 stamp duty need to pay but when I ask my bank from which I took CC limit they said to pay 0.2 percent on total amount. However my company already paid 0.2 percent stamp duty on deed of hypothecation relating to same CC limit. Request to expert kindly guide me on above how much stamp duty need to pay in Maharashtra.

Regards
CS Roshan Kalmegh


P. Venu (Expert)
08 January 2019

The correct amount of stamp duty could be ascertained based on the rate specified in the schedule to the Stamp Act in force in the State concerned.

Dr J C Vashista (Expert)
09 January 2019

Being a State subject and commercial query consult a local lawyer.

Kumar Doab (Expert)
09 January 2019

Entrust the matter to legal cell of establishment or LOCAL Counsel engaged/retained by establishment.
Such counsels that are aware and proficient in LOCAL applicable enactments can help and guide you the best.

M V Gupta (Expert)
10 January 2019

Letter of continuity is taken by the banks from their customer- borrower to get confirmation that the security given by him is valid and binding on him till all CC or other liabilities are fully repaid or discharged. The letter by itself does not create security and as such attracts stamp duty of Rs. 100 under Article 5 B of the MAHARASHTRA STAMP ACT 1958. If you are from any other State check the corresponding provision under your State's stamp law.



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