State government not to collect stamp duty on telecom customers’ forms

Gujarat High Court asked the State Government not to collect stamp duty from various telecom service providers including Tata Tele Services, Bharti Airtel and Reliance Communications on customers’ application forms and cancel notices issued by the State Government to service providers in 2003.

The Court observed that, “Initially the state government asked the companies to submit information of their subscribers’ base by supplying a copy of the form containing a customer’s details”.

“The application form was treated as an agreement and stamp duty was sought. It cannot do so because it does not impound the original document,” the order passed by the Court said. Telecom companies had approached the High Court and said that the Gujarat government levied stamp duty on all subscriber applications or customers’ enrolment forms by considering it an ‘instrument’, which is chargeable under the Bombay Stamp Act.

Telecom companies had approached the High Court and said that the Gujarat government levied stamp duty on all subscriber applications or customers’ enrolment forms by considering it an ‘instrument’, which is chargeable under the Bombay Stamp Act, and under which telecom service providers were asked to shell out Rs 60 per customer form as an ‘instrument’, but later they were asked to pay Rs 50 per form by treating it as an ‘agreement’.

Petitioners also argued that, “the government does not impound these forms and it cannot impose stamp duty merely on basis of data provided by Telecom Regulation Authority of India (TRAI)”.

However, Justice C L Soni of the Gujarat High Court directed the Gujarat government not to collect stamp duty on customers’ application forms and cancel notices issued by the state government to service providers in 2003.

Quoting the petitioner’s submission, Court ordered that, “the form is not an instrument within the definition of Section 2(l) of the Act and thus not chargeable, and even if it is considered as instrument, no duty is leviable thereon unless dutiable events occur under the provisions of the Act”.

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