Small businesses bailout hits stamp duty hurdle
Parul June 25, 2020
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As per news reports, the state-level stamp duties on loan deeds are discouraging micro, small and medium enterprises (MSMEs) from tapping the Union government’s Rs 3 trillion liquidity programme.
Reports claim that in a meeting with finance minister Nirmala Sitharaman, lenders pointed out that many of these small firms were not using the facility as they could not afford to pay stamp duty.
According to the ministry officials, requests for states for a stamp duty waiver have been made however, a final decision rests with states.
As per government data, under the emergency credit line backed by a government guarantee, banks have sanctioned loans worth over Rs 79,000 crore as of 20 June, of which more than Rs 35,000 crore has been disbursed.
The duty is levied as a percentage of the loan amount. Some borrowers approached by banks for these funds say it does not make sense for them to pay large stamp duty for small loans. For larger MSMEs, it is more like an added cost that they do not want to shell out.