It is customary for a BTA to be structured as a „sales agreement“. In such cases, the agreement provides a general framework under which the business is transferred on the reference date. BTA itself cannot envisage a transfer and may order the execution of an „act of transfer“ [see final note 5] on or before the closing date, in order to achieve its effect. However, there are cases where the agreement contains recitals concerning the payment of consideration, the remittance of ownership of assets as well as instruments of ownership of those assets. In such cases, the BTA takes the colour of a „means of transport“ and stamp duty is levied accordingly. For example, a seller may be able to crystallize a tax loss to offset a profit, and a buyer has the potential to avoid un crystallized profits in their accounts after closing. Therefore, a purchaser should not consider the structuring of a transaction as a „sale of assets“, as the cost of tax may be lower than it may appear in the first share. Stamp duty is applied to instruments and not to transactions. If a transaction can be made without creating a transfer instrument, no tax is payable. The penalty for late filing varies depending on the period of delay. The maximum penalty is RM100 or 20% of the default tax, whichever is greater.
It is important to note that a commercial transfer agreement may order the parties to execute a transfer instrument instead of contemplating an immediate transfer. It was clearly ruled by the Supreme Court in Avinash Kumar Chauhan v. . .