Unpaid Stamp Duty Cost Paytm’s Parent Firm INR 47.12 Lakh

Nitin Konde, Bhoraniya Huda Hifzur Rehman

Aug 15, 2024 — 2 min read

Unpaid Stamp Duty Cost Paytm’s Parent Firm INR 47.12 Lakh

One97 Communications, the parent company of Paytm, has been ordered by the Office of Collector of Stamps in New Delhi to pay a penalty of INR 47.12 lakh for failing to pay stamp duty on the allotment of equity shares in recent years.

As stated in a filing with the exchange, the penalty is a consequence of the company's failure to pay stamp duty in the amount of INR 1,43,16,535 as a result of the allocation of 10,26,386 equity shares, each of which is worth INR 10.

Despite the fact that there were delays of a few days in the submission of some applications, the company submitted applications for the payment of stamp duty at the appropriate time with the Office of Collector of Stamps in New Delhi. In the order that they were submitted, the applications in question have been processed by the Office of the Collector of Stamps.

According to the filing, the company stated, "Firm has taken all of the necessary steps to be more diligent in doing our best to avoid similar instances in the future."

What Is Stamp Duty?

The government levies a charge known as stamp duty on legal papers, particularly those that pertain to the transfer of property, the issue of shares, and other types of financial transactions.

It is necessary for the legal validity and enforcement of these documents, which are payable when particular transactions take place, such as the transfer of property ownership or the formation of legal agreements.

Paytm Sailing through Troubled Waters

The Financial Intelligence Unit-India (FIU-IND) levied a penalty of INR 5.49 crore against Paytm Payments Bank Ltd. for violating the Prevention of Money Laundering Act earlier in the month of March.

The bank was allegedly involved in supporting illicit activities, such as online gambling, through its accounts, which led to the imposition of the penalty. According to the findings of the Financial Intelligence Unit of India (FIU-IND), the bank has violated the rules regarding anti-money laundering, combatting financing of terrorism, and KYC (Know Your Client).

In its response, Paytm Payments Bank stated that the problems were related to a business sector that had been discontinued and that it has also enhanced its monitoring and reporting mechanisms since previous statements.

This is a warning lesson for all businesses, as Paytm went from being a pioneering firm to having to face regulatory roadblocks. Because of this, the complex equilibrium that exists between rapid growth and tight compliance is brought to light. All companies would be well to take note of Paytm's experiences and reevaluate their compliance practices in light of these difficulties.

Innovation is the engine that drives expansion, but compliance with laws and regulations is what assures long-term viability. By ensuring that their pursuit of innovation does not eclipse the need for compliance, businesses have a responsibility to work towards striking a balance between these factors.