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Franking of share certificates

Shridhi Jain (Company Secretary) (1678 Points)

09 June 2012

Dear members,

What is franking of share certificates?

Is it mandatory? How is it done?

I hv no idea so pls elaborate on this topic.

Thanks

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5 Replies

Shridhi Jain (Company Secretary) (1678 Points)
Replied 09 June 2012

It is general practice to pay stamp duty on share certificate by affixing adhesive revenue stamp on it. But recently Collector of Stamp, Delhi has issued showcause notice to several companies to pay stamp duty on share certificates. When checked with the concerned authorities at Collector of Stamp, Samnath Marg, New Delhi, they have confirmed that since revenue stamp is not a valid instrument for payment of stamp duty. Therefore, all the previous transactions where revewnue stamp is affixed as consideration, becomes invalid. All such companies have to pay penalty and apply for condonation of delay in payment of stamp duty.

WAT IS THIS? HOW TO PAY STAMP DUTY ON SHARE CERTIFICATES???

(Guest)

Origin
	Collector of Stamp, Samnath Marg, New Delhi, have confirmed that since revenue stamp is not a valid instrument for payment of stamp duty. Therefore, all the previous transactions where revewnue stamp is affixed as consideration, becomes invalid. All such companies have to pay penalty and apply for condonation of delay in payment of stamp duty.

Hi,

Revenue stamp is the appropriate way to pay stamp duty on issue of shares. There is nothing wrong in it. Pls cross check again with the authorities ?

Regards, Neha

Shridhi Jain (Company Secretary) (1678 Points)
Replied 09 June 2012

Thanks neha. But r u sure on this???

I hv heard that no revenue stamps is affixed on share certificates now.

What is franking? How can it be done?

(Guest)

According to

THE RAJASTHAN STAMP ACT, 1998

Section 2 (xii) says

(xii) "duly stamped" as applied to an instrument, means that the instrument bears an adhesive or impressed stamp of not less than the proper Amount and that such stamp has been affixed or used in accordance with law for the time being in force in the state;

(xxxvi) "Stamp" means any mark, seal or endorsement by any agency or person duly authorized by the Inspector General of Stamps, and includes an adhesive or impressed stamp, for the purposes of duty chargeable under this Act."

THE RAJASTHAN STAMP ACT is applicable in my case. Above were the relevant provision of THE RAJASTHAN STAMP ACT. You pls check for the respective stamp act applicable in your case.

Regards,

Neha