According to the Court of Appeal in the recent case of Pemungut Duti Setem v. GTP Network Sdn Bhd [2026] CLJU 2259, the answer is no. This article outlines the key legal issues and decisions of the Court of Appeal, which reinforces the Federal Court’s 2025 decision in Havi Logistics (M) Sdn Bhd v. Pemungut Duti Setem [2025] 2 MLJ 845 (“Havi Logistics”) and closes off arguments many businesses have relied on to reduce their stamp duty exposure.
Case Background
- On 1 August 2023, GTP Network Sdn Bhd (“GTP”) entered into an Asset Purchase Agreement (“APA”) to acquire 16 telecommunication towers and related equipment from MEBA Holdings Sdn Bhd for RM15 million. The APA described these sale assets as “strictly chattels, moveable assets and equipment“, which were transferred by physical delivery.
- Although beneficial ownership of the assets passed on the agreement date, the APA imposed further acts to be done before the transfer could be completed and legal ownership passed to GTP. Such further acts included executing license agreements, novation agreements, right of way agreements and obtaining regulatory permits.
- The Collector of Stamp Duties (“PDS”) assessed the APA with an ad valorem duty of RM584,020 under Section 21(1) of the Stamp Act 1949 (“SA 1949”) and Item 32(a) of the First Schedule, on the ground that the APA was a conveyance on sale.
- GTP disputed this, arguing that the APA was merely a simple agreement for the sale of goods/chattels attracting only a nominal RM10 duty under Item 4.
Key Legal Issues
- Stamp duty classification of APA: Whether an APA for sale of capital assets constitutes a “conveyance on sale” under Section 21(1) of the SA 1949 and therefore attracts an ad valorem duty under Item 32(a) First Schedule of the SA 1949.
- Scope of the “goods” exception: Whether the sale assets which included telecommunication towers would qualify as “goods, wares or merchandise” under Section 21(1) and Item 4(a) and be exempted from ad valorem duty, or whether that exception is limited to trading goods only.
- Impact of completion timing: Whether deferring the transfer of the legal title of sale assets to a future completion date would prevent the APA from being charged with ad valorem duty under Item 32(a) as an instrument of conveyance on sale.
High Court’s Decision: In Favour of GTP
Ruling in favour of GTP, the High Court held that the APA was merely an “agreement to convey” and not a “conveyance on sale,” and hence nominal duty of RM10 instead of ad valorem duty applied. The reasoning included:
- No immediate transfer: The APA contemplated future acts and further documentation to be done before completion could occur and legal ownership could pass, thereby resulting in a delayed asset transfer.
- Deferred completion: Ad valorem duty is only chargeable where an instrument effects an immediate and complete transfer, with nothing further to be done. Since completion here was deferred to a future date, ad valorem duty could not apply.
- APA was not a transfer document: As further acts were necessary for GTP to obtain effective ownership and use of the assets, the Court held that the APA itself did not transfer the assets.
Disagreeing with this decision, the PDS appealed to the Court of Appeal.
Court of Appeal: High Court Decision Reversed
The Court of Appeal allowed the PDS’s appeal and overturned the High Court’s decision, holding that:
- Narrow interpretation of “goods”: The exception for “goods” in Section 21(1) applies only to trading goods (i.e., inventory or stock-in-trade), but not to fixed or capital assets. As the sale assets under the APA are movable property in the nature of capital assets, they did not qualify as “goods, wares or merchandise” under section 21(1) and Item 4(a) of the First Schedule, and hence not entitled to stamp duty exemption.
- Timing of title transfer is immaterial: The Court of Appeal affirmed that the timing of completion, or when title actually passes, is not determinative of whether an instrument is a conveyance on sale. What mattered was that both parties intended to ultimately pass title to the assets to GTP, regardless of the actual completion date.
- Adoption of Havi Logistics approach: The Court of Appeal followed the Federal Court’s 2025 decision in Havi Logistics, departing from the earlier approach in BASF Services¹. It affirmed that an APA for the sale of business assets is a “conveyance on sale”, regardless of whether any further acts are required to complete the transfer of property.
Business Implications and Recommendations
- Deferred completion will not mitigate stamp duty exposure. Structuring an APA with a future completion date, or making the transfer conditional on further acts or documentation, will not reduce stamp duty liability if the underlying intent is a genuine sale and transfer of assets.
- “Chattel” status alone will not secure nominal duty. Describing assets as movable property or chattels will not automatically render them as “goods” chargeable only with nominal RM10 duty under Item 4(a). What matters is whether the assets are capital assets (ad valorem duty applies) or genuine trading stock/inventory (nominal duty may apply).
- Re-assess pending and upcoming asset acquisitions. Businesses currently negotiating or structuring APAs, particularly those involving a mixture of fixed assets, equipment, machinery, contracts, inventories, raw materials, stock-in-trade or other assets, should consider the stamp duty implications more prudently and correctly identify the applicable stamp duty classifications for each type of asset under the SA 1949.
- Always consult early on deal structuring. Businesses should seek appropriate stamp duty advice at the structuring stage of an asset acquisition, rather than after the APA is signed. It is highly recommended to factor in stamp duty considerations for each different type of sale asset during the structuring stage, and address them properly in the transactional documents to avoid overpaying or incurring unwanted stamp duties.
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¹ BASF Services (M) Sdn Bhd v. Pemungut Duti Setem [2010] 5 CLJ 109
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This article was written by Chin Wan Xin (Associate) from Donovan & Ho’s corporate practice.
Our corporate practice group advises on corporate acquisitions, restructuring exercises, joint venture arrangements, shareholder agreements, employee share options and franchise businesses, Malaysia start-up founders and can assist with venture capital funds in Seed, Series A & B funding rounds. Feel free to contact us if you have any queries.
