Since the transfer provided for in the agreement is the sale of an undertaking as a whole, it cannot be specifically equated with the sale of movable or immovable property. Both the IS Act and the State Stamp Act do not contain any specific provision that imposes a levy on an agreement on the transfer of a «business» as such. It is therefore imperative that each asset to be transferred to the purchaser with a BTA is individually marked as movable or immovable for stamp duty purposes. The collection of stamp duty depends on the State in which the agreement is implemented. For clarity, we want to look at the effects of stamp duty on a BTA under central and state legislation. Article 25 of the BS Act prescribes the stamp duty to be paid on a transport instrument for movable and/or immovable property. However, the BS Act expressly stipulates that if an agreement on the sale of a property results in the transfer of ownership of that property before or after performance, this is considered a transfer and stamp duty is levied accordingly. The BS Act also provides for an exemption in the event that the «contract of sale» is considered a transfer. That is, in the event that the BTA itself causes the transfer of movable and immovable property that constitutes the company to ensure that this document is duly stamped as a transfer in accordance with Article 25 of the BS Act, the stamp duty paid for this agreement will be adjusted to the total stamp duty levied on the transport document. The BS Act follows a regime similar to the IS Act, with section 5 of its schedule requiring that stamp duty be levied on an instrument that is an «agreement or its registrations, or a memorandum and agreement». It should be noted that article 5 (h) (A) (iv) expressly establishes an agreement that: (a) creates obligations, rights or interests; (b) has a monetary value; and (c) are not subject to any other provision of the BS Act. Similarly, section 5(g) of Act CS prescribes the stamp duty payable on a contract for the sale of movable property.
In the event that possession of movable property is delivered or agreed as delivered without the performance of an act of transfer, the stamp duty prescribed in such an agreement is three per cent (3%) of the consideration or market value of the property, whichever is greater. In the event that possession of the good is not delivered, the liability of stamp duty is limited to TWENTY THOUSAND INR. Apart from these provisions, a residual clause under Article 5(j) of the CS Act provides that any agreement not expressly provided for in Article 5 is duly stamped for INR two cents. Therefore, the stamp duty payable on a BTA exported to the State of Karnataka depends on the structure of the BTA, whether the deed of transfer is to be performed by the parties in respect of movable property that is part of the commercial enterprise and whether an enterprise allegedly transferred under a BTA can be treated as movable property or immovable property. Article 5 of the Schedule to the IS Act prescribes the stamp duty to be levied on an «agreement or memorandum of understanding». Article 5 further subdivides several categories on the basis of the subject matter of an agreement setting a specific duty for a given instrument. Article 5(c) provides for a residual scheme classifying all agreements not expressly provided for and making the tax chargeable separately. If a contract does not intend to act as an immediate transfer of the sale of ownership, that instrument should be stamped as an agreement rather than a transfer. An agreement to sell a company with its assets, including goodwill, would not constitute a transfer, but would simply be an agreement to sell, although the parties have provided that the transaction will take effect from the date of the agreement upon completion of the transaction and although no actual transfer deed relating to goodwill and movable property is subsequently drawn up to complete the proposed sale.
(a deed of sale is only in B. Respect for real estate). [See endnote 8] After reaching an agreement, the parties tend to meet in person to execute such an agreement, which has now been deemed unnecessary. You can print the signature page, then sign, scan, and email the other party. However, it is advisable that the agreements also include a clause that explicitly states that the delivery of signed counterparties by email in «portable document format» (PDF) must be as efficient as the signature and personal delivery of the counterparty. The stamp duty to be collected may be up to two rupees per thousand rupees of the monetary value specified in the agreement. An agreement in the form of a BTA falls directly under section 5(h)(A) of the BS Act. Despite the general nature of the description in section 5(h)(A), the BS Act retained a residual provision under section 5(h)(B) requiring a stamp duty of INR one hundred (100) only for agreements that are not otherwise provided. As Article 5(h)(A) describes the instrument in more detail, an FTA carried out in the State of Maharashtra should be properly stamped in accordance with Article 5(h)(A) and not Article 5(h)(B). The CS Act departs from both the BS Act and the IS Act, in light of the specific provisions on the transfer of movable and immovable property under Article 5 of the CS Act. Article 5 (e) of Act CS imposes stamp duty levied on a contract for the sale of immovable property in partial performance of the contract. In the event that possession of the goods is delivered or agreed before the performance of the carriage, the prescribed stamp duty shall be the same as the obligation imposed on a transport document in accordance with Article 20.
Similar to the BS Act, the KS Act also provides for the charging of stamp duty to the tax paid on the transport certificate. In the event that possession of the good is not delivered, the liability of stamp duty for such agreements is limited to TWENTY THOUSAND INR. Under the Indian Contract Act of 1872, an agreement is valid and can be performed if it meets the requirements of a valid contract, i.e. offer and acceptance, free consent, legal purpose, contractual capacity and capacity, legal consideration and legal purpose. Electronic contracts are contracts concluded by means of an electronic means of communication such as e-mail, the Internet and fax, and section 10A of the Information Technology Act 2000 («Information Technology Act») confirms the validity and applicability of such contracts. . . .