The amendments in the Indian Stamp Act, 1899 brought through Finance Act 2019 and Rules made thereunder will come into effect from July 1.
"In order to facilitate ease of doing business and to bring in the uniformity of the stamp duty on securities across States and thereby build a pan-India securities market, the Central Government, after due deliberations and consultations with the States, through requisite amendments in the Indian Stamp Act, 1899 and Rules made thereunder, has created the legal and institutional mechsm to enable states to collect stamp duty on securities market instruments at one place by one agency (through Stock Exchange or Clearing Corporation authorized by it or by the Depository) on one instrument," read an official statement issued by the Finance Ministry.
"A mechsm for appropriately sharing the stamp duty with relevant state governments has also been developed which is based on the state of domicile of the buyer," it read.
"The present system of collection of stamp duty on securities market transactions led to multiple rates for the same instrument, resulting in jurisdictional disputes and multiple incidences of duty, thereby raising the transaction costs in the securities market and hurting capital formation," it further read.
"The relevant provisions of the Finance Act, 2019 amending the Indian Stamp Act, 1899 and the Indian Stamp (Collection of Stamp-Duty through Stock Exchanges, Clearing Corporations and Depositories) Rules, 2019 were notified simultaneously on 10th December, 2019 and these were to come into force from 9th January, 2020, which was later extended to 1st April, 2020 vide notifications dated 8th January, 2020," the Finance Ministry said.
"Further, considering the requests received from stakeholders, country-wide lockdown situation due to COVID-19 and in line with the relaxations given on statutory and regulatory compliance in other sectors, the date for implementation of amendments in the Indian Stamp Act, 1899 brought through Finance Act 2019 and Rules made thereunder was further extended to 1st July, 2020 vide notifications dated 30th March, 2020," it added.
The Finance Ministry further said that to achieve the rationalisation of stamp duty structures, the amendments, inter-alia, provided for reform in order to prevent multiple incidences of taxation. No stamp duty shall be collected by the States on any secondary record of transaction associated with a transaction on which the depository/stock exchange has been authorised to collect the stamp duty, it added.
( With inputs from ANI )