G.O. (Ms.) No. 29, Reduction of Stamp Duty and Registration Fees for Amalgamation or Reconstruction of Companies, 2019

What the government order covers

G.O. (Ms.) No. 29, issued by the Commercial Taxes and Registration (J1) Department on March 1, 2019, implements an announcement in the Budget Speech for 2019 to 2020. It concerns instruments that record a transfer of property relating to the amalgamation or reconstruction of companies.

The relief is specifically connected with company amalgamation or reconstruction. The text does not extend it to an ordinary sale or other transfer of immovable property that is unrelated to either process.

Stamp duty and registration fee

Under G.O. (Ms.) No. 29, the following reduced charges apply:

• Stamp duty is 2 percent of the market value of the immovable property or 0.6 percent of the aggregate market value of the shares, whichever amount is higher.
• Registration fee is reduced to Rs. 30,000 for an instrument transferring immovable property in connection with the amalgamation or reconstruction of companies.
• The higher of the two stated stamp duty calculations must be used. A company cannot choose the lower calculation merely because it is more favourable.

Who may be affected

The reductions in G.O. (Ms.) No. 29 are relevant to companies undergoing amalgamation or reconstruction where the transaction transfers property, including immovable property. They may also be relevant to company representatives and professionals preparing, valuing or presenting the transfer instrument for registration.

An individual property buyer or owner is affected only if the property transfer forms part of a company amalgamation or reconstruction described in the notifications. The document does not announce a general reduction for individual purchases or sales.

Publication and registration administration

The Commercial Taxes and Registration (J1) Department directed that the appended notifications be published in an extraordinary issue of the Tamil Nadu Government Gazette dated March 1, 2019. The notifications provide the formal reductions under the applicable stamp and registration laws.

The Inspector General of Registration circulated the government order for action and information through a communication dated March 6, 2019. The recipients included all Sub Registrars, District Registrars and Deputy Inspectors General of Registration.