Stamp Duty on Amalgamations

The Mint has a column by Heena Singhvi that discusses the often contentious issue of whether stamp duty is payable on an order the High Court sanctioning a scheme of amalgamation between two or more companies. Of greater relevance is the discussion of the Delhi High Court decision in Delhi Towers Ltd. v. G.N.C.T. of Delhi (MANU/DE/3152/2009), delivered on 4 December 2009, where the court held that an order of the High Court sanctioning a scheme of amalgamation would fall within the definition of “conveyance” under the Indian Stamp Act, 1899 thereby requiring payment of stamp duty. That is so even where the definition does not expressly include such order of the High Court.

Although the court’s reasoning is not entirely unusual (having been adopted in the past by the Bombay High Court in Li Taka Pharmaceuticals Ltd. v. State of Maharashtra in 1997), it does clarify the position in Delhi. Moreover, greater acceptability of such interpretation may embolden stamp authorities in other states with similar definition of “conveyance” in their stamp duty legislation to levy duty in relation to schemes of amalgamation or even other forms of arrangement such as demergers.

About the author

Umakanth Varottil

Umakanth Varottil is an Associate Professor at the Faculty of Law, National University of Singapore. He specializes in corporate law and governance, mergers and acquisitions and cross-border investments. Prior to his foray into academia, Umakanth was a partner at a pre-eminent law firm in India.


  • One important point to note is that as per this judgement, the valuation will be based on the price of the shares of the transferee company. Now the question is which valuation has to be taken into account – the valuation report submitted in the court or the valuation as on effective date?

  • One ore important issue is regarding amalgamation of companies having registered offices in different states. Since the stamp duty varies from state to state, which state stamp duty will be applicable. Secondly if the fresh shares were alloted from a different state for ex. union territory, what will be the position.

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