Gujarat Stamp Act Broadens “Conveyance” Definition to Include Change in Control Agreements: Major Implications for M&A and Restructuring

Effective April 10, 2025, the Gujarat Stamp (Amendment) Act, 2025, has introduced a significant expansion to the definition of “Conveyance.” This amendment now explicitly includes “any agreement for takeover of management or control of a company through transfer or purchase of shares.” This represents a major shift in the state’s stamp duty regime, with far-reaching implications for mergers and acquisitions (M&A), private equity, and corporate restructuring deals.

Historically, stamp duty in Gujarat was predominantly levied on the transfer of physical assets or formal court-approved merger orders. The revised definition means that even a share purchase agreement (SPA), if it leads to a change in the management or control of a company, could now attract stamp duty under the Gujarat Stamp Act.

Key Implications for Businesses and Dealmakers

This expanded scope of “Conveyance” carries several critical implications:

• Increased Transaction Costs: Depending on the asset composition of the company (movable versus immovable assets), stamp duty ranging from 2% to 4.9% may now be applicable. This could significantly increase the overall transaction costs for M&A, private equity, and buyout deals involving companies with a nexus to Gujarat.
• Influence on Deal Structuring: The new provisions may compel dealmakers to re-evaluate how share-based acquisitions and corporate restructurings are structured. There will be a greater need for meticulous planning to assess and potentially mitigate stamp duty liabilities.
• Broader Legal Widening: This change is part of a broader trend of widening the application of stamp duty law in Gujarat. The Act now also covers NCLT orders under Sections 230–234 (relating to compromises, arrangements, and amalgamations), Insolvency and Bankruptcy Code (IBC) resolution plans, and fast-track mergers under Section 233 of the Companies Act, 2013.

Navigating the Complexities

Given the broadened scope, it is now imperative for dealmakers, corporate advisors, and legal professionals to carefully assess how stamp duty liabilities might be triggered, especially in transactions where Gujarat has a jurisdictional nexus.

The amendment raises interesting questions regarding its interplay with complex multi-state or cross-border restructurings. For instance, scenarios where either the transferor or transferee entity is situated in Gujarat, or where a change in the shareholding of an offshore or out-of-state holding company results in a consequential change in control of a Gujarat-based company, will require careful examination under the new provisions. Understanding these nuances will be critical for effective deal execution and compliance.

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Dhairya Chaniyara

Senior Associate | Financial Advisory | dhairya.c@treelife.in

Focuses on direct tax and regulatory services with a specialization in GIFT IFSC. Brings experience from various industries, including manufacturing, FMCG, IT-ITES, and healthcare, to deliver impactful tax solutions.