MUMBAI: The Maharashtra Cabinet on Wednesday cleared a proposal to amend the relevant Act to charge stamp duty on approved plans of company merger or demerger under the Insolvency and Bankruptcy Code, 2016.
An official statement issued after the weekly cabinet meeting said the government will amend the Maharashtra Stamp Act to facilitate the change, which will generate revenue for the state.
According to an official, for the reorganisation and insolvency resolution of corporate persons, the National Company Law Tribunal (NCLT) approves the resolution plan under the Insolvency and Bankruptcy Code (IBC) in respect of merger, demerger or amalgamation of companies.
The official said that at present the merger or amalgamation of companies under the Companies Act, 2013 or under the Banking Regulation Act, 1949, is chargeable to stamp duty under Article 25(da) of the schedule 1 to the Maharashtra Stamp Act.
"As the amalgamation or merger act involves the transfer of assets and liabilities from one company to another company, it has become imperative to charge the order of the NCLT or the Board for Industrial and Financial Construction, as the case may be, sanctioning the scheme," he said.
"Therefore, there is a need to legislate law to charge 'such' order (passed under the IBC) with stamp duty," the official said, adding the move will help boost revenue of the state government.
The IBC was enacted to consolidate and amend the laws relating to reorganisation and insolvency resolution of corporate persons, partnership firms and individuals.
The code aims to help creditors recover dues and prevent bad loans besides speed up insolvency proceedings.