We will not recover stamp duty from old transactions: UP stamp dept

The Uttar Pradesh stamps and registrations department Wednesday said it will not go ahead with its plan to recover stamp fee from thousands of companies that sold

The Uttar Pradesh stamps and registrations department Wednesday said it will not go ahead with its plan to recover stamp fee from thousands of companies that sold or bought immovable assets without paying the stamp fee in the past 10 years.

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The department, on February 4, 2020, had issued an order directing Noida officials to start preparing the database of those who got the immovable assets transferred, via sale or purchase of shares, of companies that own commercial, industrial and institutional assets.

Companies and industrial bodies had objected to the move and said it would put an undue financial burden on the businessman.

“We have been directed by top officials that we will charge 5% stamp fee from companies for sale or purchase of shares to transfer ownership of immovable assets from February 4, 2020, onwards. However, it has been decided that stamp fee will not be recovered from those who got these transactions done in the past 10 years,” GP Singh deputy inspector general (DIG), Noida stamps and registrations department, said.

The UP government changed its stand after industrial bodies came out in protest of the February 4 order. The order also dictates that from now, companies owning assets in Noida will have to pay 5% of the assets’ value as stamp fee if they transfer its ownership.

In October 11, 2010, the UP government issued an order stating that companies that are run by board members and own commercial, industrial and institutional assets (plots and building) do not need to pay stamp fee, officials said.

To benefit from this 2010 order, many companies in Noida transferred ownership rights by changing its board members or changing the rules of the company.

As per government rules, if an immovable asset is sold or its ownership rights are transferred, the government charges 5% of the cost of the total asset as stamp fee. For instance, if a property worth ₹10 crore is sold or its ownership is transferred, then the buyer has to pay ₹50 lakh as stamp fee, officials said.

“We were planning to move the Allahabad high court against the February 4 order. But we will not move court if the government withdraws the order and shows us a copy of the same,” Vipin Malhan, president of Noida Entrepreneur association, said.