A wholly owned subsidiary merging with its parent company will no longer have to pay stamp duty to the Delhi government on account of vesting of the immovable properties of the subsidiary company with the parent company.
In a recent judgement, the Delhi High Court has held that once the amalgamation order is approved by the court, the parent company does not have to pay stamp duty to the state.
The court, however, held in case of merger of two companies unrelated to each other (independent /sharing no subsidiary ? parent relationship), the transferee company has to pay stamp duty on account of vesting of the immovable properties of the transferor company with the transferee company.
The order came in a case involving Delhi Towers Ltd and the state government in which the company moved the high court after the state government refused to accept its scheme of merger without payment of stamp duty.