ICSI Representation to Department of Revenue: Resolving the Stamp Duty Conflict on Securities Issuance

Background and Context

The Institute of Company Secretaries of India (ICSI) has formally approached the Department of Revenue, seeking urgent clarification on a pressing jurisdictional dispute — specifically, which authority holds the power to levy and collect stamp duty when companies issue securities. The representation, bearing reference G&PD: DoR/FM: 01/2025-26 dated 16th March 2026, was addressed to Shri Arvind Shrivastava, Secretary (Revenue), Department of Revenue, and brings to light a growing compliance crisis stemming from conflicting provisions under the Indian Stamp Act, 1899.

At the heart of the matter lies a direct conflict between:

  • Section 9A of the Indian Stamp Act, 1899 (as inserted by the Finance Act, 2019), which empowers depositories such as NSDL and CDSL to collect stamp duty on behalf of state governments, and
  • Article 19 of Schedule I-A of the Indian Stamp Act, 1899, which is a state-specific provision applicable to the NCT of Delhi, requiring companies with their registered offices in Delhi to pay stamp duty directly to the state government at the rate of 0.1% on the value of shares issued.

This regulatory conflict has created a situation where companies — particularly those registered in Delhi — are caught between two competing authorities, each asserting its right to collect stamp duty on the same transaction.

The Triggering Event: Delhi Government's September 2025 Communication

The immediate catalyst for this representation was a circular dated 29th September 2025 issued by the Office of the Divisional Commissioner, Stamp and Registration Branch, Revenue Department, NCT of Delhi. This communication:

  1. Directed all companies with registered offices in the NCT of Delhi to pay stamp duty on share issuance at 0.1% of the value of shares, in accordance with Article 19 of Schedule I-A of the Indian Stamp Act, 1899.
  2. Simultaneously instructed National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) to cease collecting stamp duty under Article 19 of Schedule I-A for instruments pertaining to Delhi-based companies, asserting that the power to levy and collect such duty rests exclusively with the Government of NCT of Delhi.

This directive placed companies in a deeply uncertain position — one agency (the depository) was already collecting stamp duty under the central framework, and now the state government was asserting an independent, overriding claim on the same.

Understanding the Statutory Framework

Section 9A of the Indian Stamp Act, 1899 — The Central Mechanism

Section 9A, introduced through the Finance Act, 2019, was designed to create a unified, technology-driven mechanism for stamp duty collection on securities transactions. The provision covers three distinct scenarios: