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Stamp Duty on Consortium Deals

Published on Wed, Aug 12,2015 | 22:51, Updated at Wed, Aug 12 at 22:51Source : 

In an important development for consortium financing deals, the Supreme Court has overturned a Gujarat High Court decision in the Coastal Gujarat Power case. The Supreme Court said in consortium deals, stamp duty is applicable on individual transactions and not just on the instruments. The SC has ordered Coastal Gujarat Power to pay the deficit stamp duty of Rs 50.4 lakhs as well as interest as directed by Revenue.

Coastal Gujarat Power is a Tata Power owned spv for the Mundra Ultra Mega Power Project. It secured consortium finance from 13 financial institutions. Coastal Gujarat Power mortgaged its assets with lead trustee SBI, appointed by the consortium, and paid Rs 4.2 lakhs stamp duty on the agreement with SBI. But the tax department argued that the agreement with SBI was a combination of 13 mortgages and claimed Rs 54.6 lakhs in stamp duty payable. The Gujarat High Court had ruled in favour of Coastal Gujarat Power but now that ruling has been overturned. This could have wider ramifications for consortium financing. The Supreme Court order is attached here…
Attachments : Stamp Duty - Consortiums Order BY SC.pdf

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