Vijay Shekhar Sharma's Paytm fined Rs 47 lakh; Here's why

Vijay Shekhar Sharma-led fintech major Paytm's company One97 Communications Ltd has been fined Rs 47.1 lakh by the Office of Collector of Stamps, New Delhi.

The fine was imposed due to the company's failure to pay stamp duty on the allotment of equity shares in previous years.

The penalty is in accordance with Section 40(1)(b) of the Indian Stamp Act, 1899, which governs the payment of stamp duty on legal documents, including those related to share issuances.

Details of the non-payment

The penalty relates to the non-payment of stamp duty amounting to Rs 1,43,16,535 on the allotment of 10,26,386 equity shares, each valued at Rs 10. 

According to Paytm, the necessary applications for stamp duty payment were submitted to the relevant authorities, but some of these applications were delayed. The company assured that these delays were only by a few days and that all applications were eventually processed in sequence.

"The Company had submitted applications for payment of stamp duty at the relevant time with the Office of Collector of Stamps, New Delhi, although there were delays of a few days in submission of some applications. The said applications have been processed by the Office of Collector of Stamps in sequence. We have taken all necessary steps to be more diligent in avoiding such instances in the future," the company informed in an exchange filing.

Paytm also said that there is no impact on operations or other activities of the company.

Ongoing regulatory challenges

This fine adds to a series of regulatory challenges faced by Paytm and its subsidiaries. Earlier this year, Paytm Payments Bank Ltd (PPBL), an associate of One97 Communications, was penalized by the Reserve Bank of India (RBI) for non-compliance with Know Your Customer (KYC) norms.

The bank was prohibited from accepting new customers, leading to significant changes within the organization, including the departure of key executives.