G.O. Ms. No. 47, Notification under the Indian Stamp Act, 2020
The Commercial Taxes and Registration Department of the Government of Tamil Nadu issued Government Order (Ms.) No. 47, Commercial Taxes and Registration (J1), dated 19 February 2020, reducing stamp duty on property transfer instruments connected with company amalgamation or reconstruction schemes. The notification applies with effect from 1 April 1956 and supersedes Commercial Taxes and Registration Department Notification No. II(2)/CTR/205(j-1)/2019 dated 1 March 2019.
What the notification governs
Government Order (Ms.) No. 47, Commercial Taxes and Registration (J1), dated 19 February 2020, was issued by the Commercial Taxes and Registration Department under the Indian Stamp Act, 1899. It reduces the stamp duty payable on instruments transferring property under a scheme for the amalgamation or reconstruction of companies.
The reduced duty applies with effect from 1 April 1956. The notification replaces Commercial Taxes and Registration Department Notification No. II(2)/CTR/205(j-1)/2019, which was published on 1 March 2019.
Who is affected
Government Order (Ms.) No. 47 affects companies involved in an amalgamation or reconstruction scheme where property is transferred through an instrument. It is also relevant to professionals dealing with the valuation, stamping or registration of those instruments.
A person buying or owning property outside such a company scheme is not identified as being covered by the notification.
Stamp duty calculation
Government Order (Ms.) No. 47 sets the duty at whichever of the following produces the higher amount:
- Two per cent of the market value of the immovable property.
- 0.6 per cent of the aggregate market value of the shares.
For immovable property, the value stated in the amalgamation or reconstruction scheme is used. If the scheme does not state a value, the applicable value is taken from the guideline register prevailing on the date of the order sanctioning the scheme.
Immovable property situated outside Tamil Nadu is not chargeable with duty under this notification.
Valuation of unlisted company shares
Government Order (Ms.) No. 47 provides that the market value stated in the scheme is used for shares of an unlisted company. If the scheme does not state that value, the share value shown in the companies' audited balance sheets filed with the Registrar of Companies immediately before the date of the order sanctioning the scheme is used.
Principal and subsequent instruments
Government Order (Ms.) No. 47 addresses cases where the same companies later execute another instrument solely to put the terms of the scheme into writing.
- If the later instrument is duly stamped at the required amount, the principal amalgamation or reconstruction instrument is treated as duly stamped.
- If the principal instrument is duly stamped at the required amount, the later instrument is treated as duly stamped.
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Common questions
What stamp duty applies to a company amalgamation or reconstruction property transfer?
The duty is two per cent of the market value of the immovable property or 0.6 per cent of the aggregate market value of the shares, whichever is higher.
How is immovable property valued if the scheme does not state its market value?
The market value is taken from the guideline register prevailing on the date of the order sanctioning the amalgamation or reconstruction scheme.
Is property outside Tamil Nadu included when calculating duty?
No. Immovable property situated outside Tamil Nadu is not chargeable with duty under the notification.
Does a later instrument between the same companies require separate stamping?
If the principal instrument has been duly stamped at the required amount, a later instrument executed solely to put the scheme terms into writing is treated as duly stamped. The principal instrument is likewise treated as duly stamped when that later instrument has been duly stamped at the required amount.
