Stamp duty payment

[CS Vighneshwar M.]

Dear All,

"A" is a unlisted company, its shares are demated. Know company issued further shares to its existing shareholders.
When the shares are directly credited to demat account, whether stamp duty to be paid or not?
 

Thanks in advance.

--
Regards,

Vighneshwar Bhat
Company Secretary
No 78,K.P.Temple
Sanjaynagar
Bangalore-560094
Mob.No.91+9590252851

[pavani akilla]

 stamp duty on share certificates need not be paid

 

 

pavani

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[Usha Ganapathy Subramanian]

Dear Sir,

Stamp duty need not be paid in this case.

Regards,

Usha G

On Thu, Nov 18, 2010 at 12:38 PM, CS Vighneshwar M. <bhatvi...@gmail.com> wrote:

--

[Chakri Hegde]

Dear All,

I am having different opinion on this. 

It is true that, there is no stamp duty on transfer of shares which are in Demat mode. However, No such exemption is available at the time of issue of shares irrespective of the fact that whether it is issued in physical mode or demat mode. 

You need to pay the Stamp duty applicable ( at present in Karnataka State Re. 1 for every Rs.1000   /- incl. premium, if any). Because the stamp duty is payable on the Instrument and not on the basis of Transaction.

Other views are invited............

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---------------------
With Best Wishes
Chakri G Hegde
Nissin Foods India Ltd.
Bangalore

www.topramen.in

[CS.Omkar]

Dear members!

 

In many places I have read that one of the advantage of DEMAT is "NO STAMP DUTY IS PAYABLE". It seems not corret. I agree with Mr. Chakri and Mr. Sudarshan. I quote Sec 2(j) of the Karnataka Stamp Act, 1957 which defines "instrument" includes every document 1[and record created or maintained in or by an electronic storage and retrieval device or media]1 by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded;

 

1. Inserted by act 24 of 1999 w.e.f. 18.8.1999.

 

With this amendment of 1999, it appears that even electronic form of documents will also attaract stamp duty.

 

Members, we await your feedback to conclude on subject!

 

Regards...Omkar

On Thu, Nov 18, 2010 at 2:33 PM, sudarshan <cs.sudar...@gmail.com> wrote:

I agree with Mr. Hegde, it is logical, how can there be exemption on
payment of stamp duty,
simply because the shares are in demat mode.
A single certificate for the corresponding number of demat shares, is
to be issued in the name of CDSL/NSDL as the case may be and stamp
duty (as per the respective state) is payable. The stamps are to be
pasted on a sheet attached to such a certificate.

Trust this clarifies the chapter..

Contrary views solicited..

Thanks,
Sudarshan. Shintre
Secretarial Department
Zuari Industries Limited- Goa

On Nov 18, 12:29 pm, Chakri Hegde <chakri.he...@gmail.com> wrote:
> Dear All,
>

> I am having different opinion on this.
>
> It is true that, there is no stamp duty on transfer of shares which are in
> Demat mode. However, No such exemption is available at the time of issue of
> shares irrespective of the fact that whether it is issued in physical mode
> or demat mode.
>
> You need to pay the Stamp duty applicable ( at present in Karnataka State
> Re. 1 for every Rs.1000   /- incl. premium, if any). Because the stamp duty

> is payable *on the Instrument* and *not on the basis of Transaction.*
> *
> *

[Srinivas N]

Dear Members,

 

logically it seems that stamp duty is to be paid, but still if the stamp duty is payable even on dmat transfers, the Govt, would have definitely reacted by now and made sure that stamp duty is paid on e-transfers as well.  So in my opinion stamp duty is not payable.

 

Rgds

[Srinivas N]

 

Further to add to what i have stated if duty is payable on e-transfers as well, dmat trading will also come under the purview of stamp duty, and practically i do not think it is possible.

 

Rgds,......

[Vivek Aggarwal]

Dear Vigneshwar

Stamp duty is payable on issue of an instrument. In case of issue of Shares in Demat format, no instrument is issued, so stamp duty is not payable.

Other views invited.

Regards
CS Vivek Aggarwal

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From: CS Vighneshwar M. <bhatvi...@gmail.com>
To: csmy...@googlegroups.com
Sent: Thu, 18 November, 2010 12:38:28 PM
Subject: [CSMysore] Stamp duty payment

[CS Vighneshwar M.]

Dear all,

Thanks for you views.
i refered Depositories Act and stamp act, provisions was amended by finance act 2000, it clearly specifies for issue of shares duty to be paid, for transfer of shares no need to pay any duty.

[sompal ruhil]

Dear Mr. Omkar

 

Pl note that exemption from stamp duty on issue and transfer of shares in demat form is prescribed in the Depositories Act, 1996. For your knowledge Depositories Act, 1996 is a Central Act and Payment of Stamp Duty is governed by State Act. It is also very clear as per the Constitution of India that in case difference of Central Act and State Act, the law specified in the Central Act will prevail.Hecne Karnataka Stamp Act will not override the Depositories Act and no stamp duty is required to be paid.

 

 

Thanks and regards

Sudarsan Pahi

Company Secretary

9811021854

 

On Thu, Nov 18, 2010 at 2:55 PM, CS.Omkar <acs....@gmail.com> wrote:

[CS.Omkar]

Dear Mr. Sompal,

 

Can you pls quote which section in the Depositories Act provides exemption of duty for issue of shares in DEMAT form?

 

Yes, transfer in DEMAT form is exempt as per amendment to Indian Stamp Act 1899 (Sec 8A) vide Finance Act 2000. 

 

Regards...Omkar

[Venkatesh Prasad]

Dera Members,

I will agree with the what Omkar has told.... as a simple solution i am pasting the copy of the contract note how it has served. i think it clarify beyond the doubts.

Sir / Madam,

For Demat Instructions :

Stamp duty as required under the

I/We have this day done by your order and on your account the following transactions:

CM BP ID : __________ . DP ID -  _____

relevant stamp act to be paid on

Settlement No. : As mentioned above

consolidated basis.

Order No

Order Time

Trade No.

Trade Time

Security

Buy/

Quantity

Gross Rate

Brokerage Rate

Net Rate

Gross Value (Rs.)

Brokerage

Net Settlement Value

Sell

per Security

per Security (Rs.)

per Security

Value (Rs.)

(Rs.)

(Rs.)

(Rs.)

2.01011E+15

11:31:25

As Per Annex.

11:31:25

XXXX

BUY

30

87.95

0.6596

88.6096

2638.5

19.79

2658.29

2.01011E+15

11:31:44

As Per Annex.

11:31:44

XXXX

BUY

15

102.4

0.768

103.168

1536

11.52

1547.52

OTHER CHARGES

0.89

SERVICE TAX ON BROKERAGE

3.23

STT

5

Dr

4214.93

 
 

Regards
Venkatesh Prasad K

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From: CS.Omkar <acs....@gmail.com>
To: csmy...@googlegroups.com
Sent: Thu, 18 November, 2010 2:55:09 PM
Subject: Re: [CSMysore] Re: Stamp duty payment