On presenting Budget 2020, finance minister proposes to exempt levy of stamp duty on transactions in stock exchanges established in International Financial Services Centre(IFSC).
This provision will come into force on the 1st day of April 2020. In section 9A of the Indian Stamp Act, 1899 in sub-section (2) new proviso will be amended as no stamp duty will be chargeable in respect of the instruments of transaction in stock exchanges and depositories established in any International Financial Services Centre (IFSC) set up under section 18 of the Special Economic Zones Act, 2005.
The new section 73B is inserted after section 73A of Indian Stamp Act, 1899 will state the power to issue directions and to authorize certain authorities to issue instructions etc.
The Central Government has the power to issue directions relating to such matters and subject to such conditions which is necessary and authorize the Securities Exchange Board of India Act,1992 or Reserve Bank of India Act, 1934 can issue instructions, circulars or guidelines can be given in writing.
The Amendment of section 9A elaborates as:
The provisions of this Part shall come into force on the 1st day of April 2020. In section 9A of the Indian Stamp Act, 1899, in sub-section (2), the following proviso shall be inserted, namely:––
“Provided that no such duty shall be chargeable in respect of the instruments of transaction in stock exchanges and depositories established in any International Financial Services Centre (IFSC) set up under section 18 of the Special Economic Zones Act, 2005.”.
The insertion of new section 73B of Indian Stamp Act, 1899 elaborate as
The Central Government may:
(a) Issue directions relating to such matters and subject to such conditions, as it deems necessary.
(b) in writing, authorise the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992 or the Reserve Bank of India (RBI) constituted under section 3 of the Reserve Bank of India (RBI) Act, 1934 to issue instructions, circulars or guidelines, for carrying out the provisions of Part AA of Chapter II and the rules made thereunder”.
Last year, in Finance Budget, 2019 the Govt. had inserted Section 9A to the Indian Stamp Act, 1899 whereby it was proposed to consolidate the stamp duty provisions relating to issue, sale or transfer of securities under the newly inserted section 9A and 9B of the Indian Stamp Act, 1899. The Amendment Act also proposed a uniform system for collection and payment of stamp duty on the issue and transfer of securities.
