Regulatory Alert - 26 April 2023

Gujarat HC rules on various stamp duty issues relating to scheme of arrangement inter-alia holding that composite scheme is one single instrument, allowing set off of stamp duty paid in another state etc.

The Hon'ble Gujarat High Court ('High Court') in a recent ruling¹ dealt with several aspects under the Gujarat Stamp Act, 1958 (' the Act') wherein it held as under:

• A composite scheme of arrangement comprising of transfer of undertakings by way of demerger(s)/ slump sale and merger shall be treated as a single instrument for levying stamp duty.
• In view of Explanation III(c) in Article 20(d) of Schedule-I of the Act, scheme involving only unlisted companies, the market value of shares shall be deemed to be its face value, irrespective of whether the shares are being issued at premium.