ONLINE PAYMENT OF STAMP DUTY ON SHARE CERTIFICATES

A share certificate is a certificate given to the equity shareholder of the company in the form SH-1. Share certificate being an instrument requires stamping. 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 supplementary 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.

issue of share certificate

Prior to Apr 2014, the procedure of supplying share certificates was ruled by corporations (Issue of Share Certificates) Rules, 1960. With the approaching into force of corporations (Share Capital and Debentures) Rules, 2014 w.e.f 01 Apr 2014, the procedure of supplying shares/debentures has been revisited.

What is Stamp duty?

Stamp duty is a duty levied on the legal recognition to pay the amount of tax on certain documents or instruments.

Time Limit for issuance of share certificate

As per Companies Act, 2013, there are certain time period within which the company shall issue share certificates after incorporation and allotment-

1. If the event is shared is issued to subscribers of MOA at the time of Incorporation then within 2 months share certificate has to be issued.
2. If the event is an allotment of shares i.e., fresh allotment after incorporation, then within 1 month from the date of allotment share certificate has to be issued.

Timeline to pay stamp duty without stay

As per the Indian Stamp Act, if the event is the date of issue of share certificate then the time period is within 30 days.

Every company is obligated to pay stamp duty on the value of shares through online mode within 30 days from the date of issue of share certificates.

Talking About Jurisdiction

Stamp duty needs to be paid where the registered office of the company is located.

Duty payable on stamping of shares (IN DELHI)

Stamp duty paid on the share certificates is Rs. 1/- for every Rs. 1000/- or part thereof of the value of the shares including the amount of premium.

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
• 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

In case of shares allotment after incorporation-

• Signed share certificate
• Company COI, MOA, and AOA
• Form PAS -3 along with Payment Receipt filed to ROC (in case of further allotment)
• List of allottees
• Board resolution of shares allotment to allottees
• 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.
• Certificate of earlier paid stamp duty, optional

*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.

*Stamp duty on share certificate is State subject, so it is very stated to state.

Process Duration

So, if at a time all the required documents submitted on the portal, then-

• After 1 or 2 weeks challan shall get produced
• Stamp Duty amount will be paid via Net Banking/Debit Card/ Cash/ NEFT/ RTGS.
• Print the receipt
• Take e-Stamp Certificate from the nearest branch of Delhi Stockholding after providing a printed receipt.
• Upload e-stamp Certificate copy
• After scrutiny and fixing of e-Stamp certificate, the certificate of stamp duty paid amount shall get issued and, then
• The final certificate can be downloaded from the status menu online.

Thereafter, within one-month stamping process will get complete.

Further in case of delay

As soon as all the essential documents give in to on the portal, then-

• A reference number will be produced after compliance.
• Initiated request status can be seen on the status side.
• The hearing date shall also be seen in the status side after 1 or 2 weeks or provided through email or if not received within the specified time, contact Stamp Collector, Delhi.
• In hearing with SDM, the penalty shall be charged up to ten times of stamp duty. The penalty depends on the defense of the authorized professional.
• The challan shall be generated within 1 or 2 weeks of the hearing.

In case of duplicate/split share certificate

Amount of Rs. 10/- stamp duty shall have to be paid, As it was already paid on the particular share certificates bearing a distinctive number of shares.

A 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 within the time limit of 30 days then, the company shall be liable for heavy penalty under the Act, which may extend to 10 times of the duty.

Also, the Company has to attend a hearing on the date that would be given by the concerned department/authority.

Conclusion

The share certificate shall bear the stamp duty as per the respective State from where the certificate is issued. So, it is not essentially required to pay stamp duty on a share certificate in that particular state where the registered office of the company is located, it totally depends on the execution of the share certificate where it was signed. At last, it is advised to all please pay the stamp duty in the state where the registered office of the company is located.

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