Stamp duty on Share certf. in Delhi

Hi

Our co's registered office is situated in New Delhi. we issued share certificates and stamp duty on same is paid by affixing revenue stamp of Re. 1 on each share certificate.

Now Auditors are objecting on the same.

According to them stamp duty is Re. 1 for Rs.1000 of the value of shares (value includes premium). Further it is to be made by presenting the share certificate before the concerned authorities who will do frnaking on share certificate.

Now please tell the solution how to deal with this issue?

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3 Replies

Ankur Garg (Company secretary) 20 April 2010

Dear Friend,

Yes objection by auditors is correct.

The rate of stamp duty on the issue of Shares in new Delhi is 0.1% i.e. Rs. 1 on face value of Rs. 1000/- of the consideration including the amount of premium.

Can you can show your BM for allotment in UP or Haryana where the stamp duty is Rs. 1 irrespective of amount involved? This is the general practice followed by companies.

Another option would be to present the share certificate to the appropriate authority subject to the provisions of section 113 (Time limit for issue of share certificate). Further tell me the date of allotment to suggest something keeping in view the provisions of section 113 of companies act, 1956.

Best Regards

SRKA SRKA SRKA (Company Secretary) 09 January 2012

Companies with registered office in Delhi have been following the practice of holding Board Meetings in UP/Haryana for issue of share certifcates and paying stamp duty accordingly. However, now these companies have started receiving notices from the Collector of stamps in Delhi asking them to provide details of share certificates issued so that stamp futy can be paid as per Delhi rules. If the Collector has his way, this would amount to enormous payments on account of stamp duty and/or penalties for certain companies who have issued shares in a big way. Does any one know of any action, own or concerted, being taken by companies against Collector's action? Would appreciate shareing of ideas by any one.
Thanks

ar (L O) 31 January 2012

Hi Ankur ji

Question : is the STAMP DUTY payable on ALLOTMENT of SHARES by a PVT LTD. Co. to Existing Shareholders AT A PREMIUM.

Pl Note...the PVt Ltd Co is NOT transferring the SHARES but ALLOTING the same. The Co has already paid stamp duty on Face Value ie PAR value. but the Department has sent notice for Stamp Duty payble on PREMIUM .. is it right ??? is there a way out. How shud one reply to the department of Revenue on This. The Pvt Company is based in New Delhi but the Meeting of BOD was held at Haryana . Pl. Help . Also pl advise what proof or evidence wud help show the BOM in Haryana . Pl Advise. Thnks