Stamp duty payment to be made online

[N.Sukumar]

NEW DELHI: Entrepreneurs will soon be able to incorporate a company in
India sitting anywhere in the world without having to face red tape.
The government is all set to introduce a centralised electronic stamp
duty payment and online vetting of charter of new companies,
irrespective of the states where they are set up.

Doing away with the need for a physical interface between the
entrepreneur and a government official will eliminate occasions for
corruption too.

Now, physical presence at the registrar of companies is essential for
stamp duty payment in the state of incorporation and vetting of the
company’s charter. The Centre has already started talking to state
governments to tackle legal issues related to amending the Stamp Act
of states and administrative issues related to duty payment.

Being a state subject, implementation of any decision related to stamp
duty at the national level needs the concurrence of all state
governments.

The move will not, however, lead to uniform stamp duty and the
proposed online payment system will manage accounting for varying duty
in different states.

The system would generate electronic stamp papers, on which the
entrepreneur has to file affidavits using digital signature. The
existing online filing system only provides for filing statutory
documents like annual reports but not for starting a new company.

The memorandum of association and articles of association of new
companies too have to be vetted physically by the RoC now. The
ministry of corporate affairs will introduce a standard template for
the charter of new companies.

Only those entrepreneurs who want to deviate from the standard
template, will need to physically go to the RoC, sources told ET. New
Delhi and Maharashtra account for most of the newly registered
companies every year, with the services sector accounting for a large
number of them. About 300 foreign companies are registered in India
every year.

N.Sukumar
Research Analyst