Payment of Stamp Duty on Share Certificates By Garima Goyal



INTRODUCTION

A share certificate is a certificate given to the shareholder of the company in the form  SH-1. Share certificate being an instrument requires stamping and Stamp duty on share certificate is a state-related matter where delay in payment of stamp duty appeals penalty.

Firstly, Stamp duty on share certificate has to be paid at the time of incorporation, and afterward on every subsequent shares allotment.

A share certificate is a printed signed document that depicts legal proof of ownership of the number of shares specified in that certificate

TIME LIMIT FOR ISSUANCE OF SHARE CERTIFICATE

Section 56(4) of the Companies Act, 2013 read with rules, contains the provisions related to time limits for issuance of share certificate

Sl No.

Particulars

Time period

1

In case of subscriber

Within 2 months from the date of incorporation

2

In case of Subsequent allotment

TIME LIMIT FOR PAYMENT OF STAMP DUTY ON SHARE CERTIFICATE

Section 32 of the Indian Stamp Act, 1899, said that

Event

Time period

Date of issue of share certificate

one month from the date of its execution

JURISDICTION

The stamp duty must be paid,preferably, where the registered office of the company is situated

DUTY PAYABLE ON STAMPING OF SHARES

Rs. 1/- for every Rs. 1000/- or part thereof of the value of the share including the amount of premium.

Here value of the shares means:

As per Section 21 of Indian Stamp Act,

Stamp duty will be paid on the issue price not on the face value. (e.g. in case of issue of security at premium, the stamp duty is payable on the issue price and not on face value of security.

Stamp duty on share certificate is State subject, so its vary state to state.

PROCESS DURATION

Once all the required documents submitted on the portal, then

after 1-2 weeks the challan shall be generated

Pay the Stamp Duty amount using Net Banking/Debit Card/ Cash/ NEFT/ RTGS.

Print the acknowledgement and

collect the e-Stamp Certificate from the nearest branch of Stock holding in Delhi by producing the printed acknowledgement at the counter.

Upload the Scan copy of e-stamp Certificate

After scrutiny and patching of e-Stamp Certificate, the Certificate of payment of stamp duty shall be issued and

Certificate can be downloaded from the status menu online.

So, within in a month process of stamping will be complete.

Further in case of delay

Once all the required documents submitted on the portal, then

Reference number will be generated after submission.

The request initiated status can be seen in the status column.

Now, the hearing date shall be shown in the status column after 1-2 weeks or shall be provided via email or if not received within the specified time please contact to the Collector of Stamp, NCT of Delhi.

In hearing with SDM, the penalty shall be levied up to 10 times of duty. The Penalty shall depend on justification of the Professional authorized for the same.

The Callahan shall be generated within 1-2 week of hearing.

CONSEQUENCE OF NON PAYMENT OF STAMP DUTY

In case of non-payment of stamp duty or evasion of payment of stamp duty on the issue of share certificate in case of allotment of share, the company shall be liable for heavy penalty under the Act, which may extend to 10 times of the duty.

DOCUMENTS REQUIRED

In case of shares are issued to the shareholders at the time of incorporation-

  • Signed share certificate
  • Company COI, MOA, and AOA
  • Form PAS 3 along with Payment Receipt filed to ROC (in case of additional allotment)
  • List of subscribers/List of allottees
  • Board resolution of shares allotment to the subscribers
  • Board resolution to issue share certificate and authorization for stamp duty payment
  • List of Directors
  • Certificate of Practicing Professional to whom the power is given to pay Stamp duty

All the required documents will be in pdf format and digitally signed by an authorized person.

The company shall pay the stamp duty through the SHCIL e-stamp website link by online mode. 

Lex comply

Click here to read the disclaimer


Write a Comment