Nod to ordinance to slash stamp duty on corporate transfers

Panaji: The state cabinet on Wednesday approved issuing an ordinance to reduce stamp duty to 5% of the market value of the property, or of the amount of consideration set forth in the instrument or order, whichever was applicable, subject to a maximum cap of Rs 10 crore, for transfers arising out of schemes of arrangement such as restructuring, amalgamation, merger or demerger, to attract investment in the state.

The cabinet said many states have prescribed a maximum cap on stamp duty payable on corporate restructuring undertaken through schemes of arrangement, thereby improving the ease of doing business (EoDB) and attracting investment.

In states such as Karnataka, Haryana, Madhya Pradesh, Rajasthan and Chhattisgarh, stamp duty is levied either at a prescribed percentage ranging from 1.5% to 5% of the market value of immovable property, or 0.5% to 5% of the aggregate value of shares issued or allotted together with the consideration paid for such transfer, whichever is higher, subject to a maximum cap on stamp duty ranging between Rs 5 crore and Rs 25 crore, the cabinet said.

Under the Indian Stamp Act, 1899, the state of Goa provides an 80% reduction in stamp duty for the transfer of property pursuant to a scheme of arrangement in the case of small firms that is up to a value of Rs 5 crore, which is still in force. However, there is presently no specific provision prescribing a capped rate of stamp duty in respect of schemes of arrangement exceeding a value of Rs 5 crore.