Stamp duty
This query is : Resolved
02 December 2012
Can stamp duty paid on issue of commercial paper by corporate be charged to Finance Cost?
03 December 2012
Stamp duty shall be charged to legal charges and not to finance cost.
07 December 2012
But as per the guidance note on revised schedule VI, the definition of Finance cost says that "any cost incurred for raising finance should be treated as finance cost."
25 July 2025
Great question about **stamp duty on issue of commercial paper (CP)** and whether it should be charged to **Finance Cost** or **Legal Charges**!
---
### What’s the usual treatment?
* **Stamp duty on issue of CP** is a cost directly related to raising funds (finance).
* According to **Accounting Standards (AS) and Guidance Note on Revised Schedule VI**, **finance cost includes any cost incurred for raising finance**.
---
### Conflicting views:
* Some practitioners treat stamp duty on CP issuance as **legal/administrative expenses**, hence charged under **Legal Charges or Miscellaneous Expenses**.
* But the **Guidance Note on Revised Schedule VI (issued by ICAI)** clarifies that **costs directly attributable to raising finance (like stamp duty, brokerage, underwriting fees, etc.) should be classified as Finance Cost.**
---
### What you should do:
* **Charge stamp duty on CP issuance to Finance Cost**, as it is a cost incurred in raising finance.
* This treatment aligns with **GAAP and prudence**, giving a true picture of the cost of borrowing.
---
### Summary:
| Treatment | Reason |
| ------------- | -------------------------------------------------- |
| Finance Cost | Stamp duty is part of cost to raise finance |
| Legal Charges | If treated as legal/admin expense (less preferred) |
---
**So, based on revised Schedule VI and Guidance Note:**
**Stamp duty on commercial paper issuance should be classified as Finance Cost.**
---
If you want, I can help draft journal entries or examples showing this treatment in accounts. Would you like that?
---
### What’s the usual treatment?
* **Stamp duty on issue of CP** is a cost directly related to raising funds (finance).
* According to **Accounting Standards (AS) and Guidance Note on Revised Schedule VI**, **finance cost includes any cost incurred for raising finance**.
---
### Conflicting views:
* Some practitioners treat stamp duty on CP issuance as **legal/administrative expenses**, hence charged under **Legal Charges or Miscellaneous Expenses**.
* But the **Guidance Note on Revised Schedule VI (issued by ICAI)** clarifies that **costs directly attributable to raising finance (like stamp duty, brokerage, underwriting fees, etc.) should be classified as Finance Cost.**
---
### What you should do:
* **Charge stamp duty on CP issuance to Finance Cost**, as it is a cost incurred in raising finance.
* This treatment aligns with **GAAP and prudence**, giving a true picture of the cost of borrowing.
---
### Summary:
| Treatment | Reason |
| ------------- | -------------------------------------------------- |
| Finance Cost | Stamp duty is part of cost to raise finance |
| Legal Charges | If treated as legal/admin expense (less preferred) |
---
**So, based on revised Schedule VI and Guidance Note:**
**Stamp duty on commercial paper issuance should be classified as Finance Cost.**
---
If you want, I can help draft journal entries or examples showing this treatment in accounts. Would you like that?
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Section 54F - Exemption on LTCG in 2026 for HP purchased in 2023
- STCG....................................................
- AMOUNT RECEIVED UNDER COMPULOSRY ACQUISITION OF AGRICULTURAL LAND
- Treatment of Pension ?annuity returns on PMVY
- TAN for Partnership
- Free lancer income
- AY 26-27 ITR-4 FILING U/S 44-ADA
- Plot of land. Cost of Acquisition
- Last year TDS Claim
- Long Term Service award taxability in hands of company
- Gst invoice numbering and delivery challan numbering
- Standard Deduction claim for EPFO Pension and ICICI Prudential Life Annuity
- Small dealers gst returns filing
- Sales amount in Gstr1
- CG after sale of flat
- E Commerce GSTR1 & 3B how to file
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
- GST Refund_RFD-01
- Form10BD was uploaded successfully without any Error but after 24 hours, Form10BE are not available
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
