LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Stamp duty on share certificate

(Guest)

Please reply ASAP

What is the rate of stamp duty on issue of share certificate in Rajasthan and if the certificate is being issued in back date what is the modus operandi.

Thnaks

Reply
Follow
Share

8 Replies

HARDIK (COMPANY SECRETARY NCFM (Corporate Governance )) (664 Points)
Replied 25 August 2010

check it out the attached file.

Attached File : 47 stamp duty rates.doc downloaded: 906 times

(Guest)

Thanks Hardik

As the stamp duty on certificate is less in Haryana in comparison to Rajasthan, can we show the BM in Haryana for the business of allotment and issue of shares and then will stamp duty of Rs.0.40 per share certificate will be legally all right.

HARDIK (COMPANY SECRETARY NCFM (Corporate Governance )) (664 Points)
Replied 25 August 2010

Stamp duty is applicable of the state in which registered office of the company is situated. so kindly note the same.

(Guest)

I think stamp duty is levied on the basis of place where the certificate is issued and executed and if the board meeting for issue of the shares was held in Haryana, the stamp duty needs to be paid to Haryana only and there is no need to look for the registered office in this case unlike we do in case of stamp duty for increase in capital.

Pls revert with practice being followed by other members on this.

Kumar (Legal Consultant) (358 Points)
Replied 26 August 2010

The duty should be in accordance with the state wherein the regd. office is located.Do it accordingly.

(Guest)

Instrument chargeable with stamp duty is executed when it is signed by the person who is executing and the place of stamp duty jurisdiction is where the instrument is executed further according to section 17 of the Stamp Act stamping has to be done before or at the time of execution of the instrument.

In case of share certificate, it is the time and place where the Board Meeting is held in which the allotment of shares is done and share certificate are issued and that place/state has got the right to collect the stamp duty. Board meeting can be held anywhere and accordingly the stamp duty liability will arise. There is no provision in the Stamp Act for paying stamp duty in respect of the share certificate on the basis of registered office of the company.

pls quote reasons and basis for your opinion/answer rather than making just a passing statement.

Thanks & Regards

1 Like

Kumar (Legal Consultant) (358 Points)
Replied 26 August 2010

Again i can say with my practical experience the duty shuld be determined by the place of the company's registered office and no matter where the board had passed the resolution.

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 28 August 2010

STAMP DUTY FOR SHARE CERTIFICATES

Upto 09-12-1985	0.50 paise per share certificate
From 10.12.1985 to 16.03.1988	Re. 1 per share certificate irrespective of value
From 17.03.1988 to 31.03.1993	Re. 1 for Rs. 100/- or part thereof (1%)
From 01.04.1993 to 30.4.1994	50 paise per Rs.100/-
With effect from 01.05.1994	Re. 1 for every one thousand including premium. (i.e. issue value)

Generally, stamp duty is paid by way of revenue stamp. Every share certificate should bear a revenue stamp of Re. 1 (for every rupees one thousand including premium.) and a common seal engraved on it. And signed by 2 directors and a authorized signatory / company secretary. No share certificate is valid without it.

Further, in case of consolidated share certificate where stamp duty is more or where it is not feasible to affix the revenue stamps, the same has to be deposited with the Collector of Stamps (as in Delhi) and in this particular case some nominal penalty will be imposed in order to regularise the late issue of certificate.