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Stamp Duty - Mortgage & Hypothecation

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Sunny

CA Business

401 Points Posted on 28 March 2023

Company ABC Pvt. Ltd. is having its registered office in Maharashtra and having presence in multiple states having different GSTIN of each state. While availing bank loan, company has to pay stamp duty. the property to be mortgage is situated in Maharashtra. However with respect to Hypothecation which is collateral to the primary security - have presence in other states as well. Due to different stamp duty in different states with respect to Hypothecation. Say For e.g. it is specific % of stamp duty in the state of Maharashtra but in some states it is flat 500 rupees only.
1. Whether a company can execute Mortgage deed in one state and hypothecation deed in another?

2. Is there any specific mention in any Stamp Act, that stamp duty on Hypothecation has to be paid only in the state where company's registered office is there?

Thank you

Replies (2)

Quick Summary

This discussion explores stamp duty implications for a company with a Maharashtra registered office but operations in multiple states, specifically regarding mortgages and hypothecation for bank loans. The core question is whether separate hypothecation deeds can be executed in different states to leverage varying stamp duty rates, or if duty is solely determined by the registered office location. It highlights that stamp duty for mortgages is typically paid where the property is located, but the applicability to hypothecation across multiple states is being investigated.

Ashok

Tax Payer

56 Points Posted on 29 March 2023

Stamp duty is usually paid in the state where the property is registered/mortgated (not related to company regd. office location).

Sunny

CA Business

401 Points Posted on 29 March 2023

Agreed - Mortgage will be in the state where it is located...
But what about Hypothecation charge - whether one has to pay additional for that? One can execute hypothecation deed in other state where company has presence and pay stamp duty of say 500 Rs. which is ok as per that state Law.

(Normally Bank executes two deed one mortgage and one Hypothecation)