I wrote this article for the Indian legal news organization Bar & Bench who kindly posted this on their website.
Stamp duty is an important issue for the various state governments in India as well as for Corporate India. The former makes a large part of its revenue through charging stamp duty. For the latter it becomes a form of additional transaction tax. The stamp duty that states levy on court orders for schemes of amalgamations, mergers and restructuring can be particularly onerous for corporates. Often, each state tries to obtain as much revenue as it can for the same transaction. In some cases, the corporate in question can end up paying stamp duty several times over on the same transaction.
In this article, I examined the fundamental logic behind the stamp duty that states levy and suggest a solution-oriented legal approach to crafting the schemes of amalgamation, mergers and restructuring themselves as a way for corporates to pay only the fair amount of stamp duty.
This is not an easy issue to solve and I look forward to your thoughts or questions on it. Please write to me at ashok@akgcounsel.com. You can find out more about me on my homepage.
