Tax proposals extract from March 2010 Budget Speech
Hon’ble Speaker, I present the Part II of the Budget before the house.
1. Review of Revenue Receipts – This Financial Year began on the backdrop of economic recession. Lower tax receipts were expected due to global recession. Even the Central Government had reduced its target of tax receipts. Considering this situation, the tax receipt target for 2009-2010 of the Sales Tax Department was fixed at Rs. 31,346/- Crore. I am happy to inform the house that the sales tax target has been achieved. The signs of global economic recession receding are visible and I hope that in the next Financial year, the revenue receipts would get a boost.
2. Computerisation of the Sales Tax Department and providing latest modern services to the dealers – Hon’ble members would remember that in the last year’s budget, it was promised that the facility of e-Registration and e-Payment would be made available to the dealers. I am happy to inform the Hon’ble members that both these facilities have been made functional. Besides these, in the last financial year e-Refund and the Audit Report Form 704 are also being accepted in the electronic format. Maharashtra has become the first State in the country to provide through Internet the electronic services like acceptance of registration application , filing of return and payment of taxes, application of refund, acceptance of audit report and application for declarations under Central Sales Tax Act. Due to this, it has become easier for the taxpayers to do the sales tax related work. This automation will facilitate implementation of Goods and Services Tax in future.
3. Establishment Of Tax Academy – Indirect tax is the principal source of State revenue. GST is proposed to be implemented in near future. For imparting training to the officers and employees of the Sales Tax Department and for carrying out research & analysis of tax collection, a Tax Academy will be established in Raigad District.
4. Amendments to VAT Act - Some amendments to the VAT Act have become necessary. Some of these changes are technical in nature and some relate to the day to day functioning of the Sales Tax Department. Amendments to this effect will be placed before the house. These changes will include allowing transaction wise assessment, provision for grant of part refunds, to make intimation and some interest orders non appealable, amendment to Section 35 , to provide quarterly return for newly registered dealers and amendment to section 29.
5. E-Services For Luxury Tax and Profession Tax – VAT returns are already being accepted electronically. In the coming Financial Year, this facility of filing electronic returns will also be provided under the Profession Tax Act and Luxury Tax Act. After the implementation of VAT, Sales Tax Department is re-organized. Profession Tax Branch also needs to be re-organized on the same lines. Accordingly, necessary amendment to this effect will be carried out.
6. Stringent provision for non issuance of bills to customers - Customer should get a bill for every purchase. Some dealers do not issue sales bills and thereby evade tax on such sales. In order to protect the interest of the consumers, penalty provision for non-issuance of bills is being made more stringent.
7. Measures for expediting refunds – After the implementation of VAT, the number of dealers claiming VAT refunds has increased substantially. The refund claims of dealers are required to be confirmed by cross-check of taxes paid on their purchases. At present, this is being done by personal visit. This causes delay in granting of refunds. To grant speedy refunds to the dealers, henceforth, it would be mandatory to record the TIN of the purchaser on the Tax Invoice. This would facilitate cross-check of the set-off and would help in disbursing the refunds speedily.
8. Composition Scheme for Builders and Developers – As per the judgement delivered by the Hon’ble Supreme Court a few years ago, VAT becomes leviable on the sale of construction material used in the construction of flats. Many consumers and consumer organizations are demanding simplification in computation of this tax. Having considered all the aspects of this demand, I hereby announce a simple composition scheme for the builders and developers. Under this scheme, one percent VAT would be payable on the contract price of flats mentioned in the agreement of sale. However, such builders and developers will not be eligible for set off under the VAT Act. This scheme shall come into force for the agreements registered after 1st April 2010.
9. Relief in Luxury Tax to small Hotels and lodges - Presently, as per the provisions of the Luxury Tax Act, the hotels charging rent upto Rs. 200 per day per accommodation are not liable to pay Luxury Tax. For rent from Rs. 200 to Rs. 1200, Luxury tax at the rate of 4% and for rent above Rs. 1200, Luxury Tax at the rate of 10% is attracted. I am hereby enhancing the limit for liability of tax for small hotels and lodges. Now, rent upto Rs. 750 per day per accommodation is being exempted. No change is proposed in respect of tax on hotels, charging rent more than Rs. 750 per day.
10. Increase in turnover limit for VAT audit - The turnover limit for audit under section 61 of VAT Act will be increased from Rs. 40 lakhs to Rs. 60 lakhs. It will also be mandatory for all the dealers covered by package scheme of incentives, to file the audit report.
11. Increase in time limit for payment of Tax by small dealers - Out of the total dealers in the State, the number of small dealers filing six monthly returns is quite large. These dealers are required to pay the tax within 21 days. This period is now being increased to 30 days.
12. Tax Relief - All the States in the country have more or less the same VAT system. There is hardly any scope for tax concessions under VAT. Still, for the goods of day to day use of common man, I have decided to exempt the tax or to reduce the tax burden.
13. Extension of Tax Relief period for Food grains and Some Other essential items, raisins, currants and tea - Rice, wheat, pulses, and flours thereof, chillies, turmeric, gur, tamarind, coconut, coriander seeds, fenugreek, parsley (suva), papad, wet dates, Solapuri Chadars and towels are presently exempt from tax upto 31st March 2010. Empowered Committee has recommended the tax rate of 4% on these goods, yet to keep the prices of these essential items under control, I declare that the tax exemption on these will continue till 31st March 2011 or the implementation of Goods and Services Tax Act, whichever is earlier. Empowered Committee has also recommended VAT @ 12.5% on raisins, currants and tea. However, I propose to continue the concessional VAT rate of 5% on these items up to 31st March 2011 or the implementation of Goods and Services Tax Act whichever is earlier. Notifications in this respect will be issued immediately.
14. Extension of tax Relief period for Aviation Turbine Fuel - For the period, up to 31st March 2010, the rate of tax on Aviation Turbine Fuel sold at small airports except Mumbai and Pune was reduced to 4%, to encourage air traffic and increase their connectivity. I propose to continue this tax concession upto 31st March 2011 or till the implementation of Goods and Services Tax Act, whichever is earlier.
15. Tax Relief to blood transfusion apparatus - Blood Transfusion apparatus is required to give blood to patients. In some chronic diseases like thalassaemia or sickle-cell, patients require frequent blood transfusion. To reduce the economic burden of treatment of such patients, I propose to reduce the rate of tax on this apparatus from 12.5% to 5%.
16. Solar lanterns tax free - To check the increase in demand of electricity in the State and to prevent environmental degradation, it is necessary to make more and more use of non-conventional energy sources. Last year, various equipments working on solar energy were exempted from VAT. I hereby expand this list to include solar lanterns.
17. Concession to Vehicles operated On battery or Solar energy - Use of vehicles that work on solar or battery power, which do not pollute the air and reduce fuel consumption need to be encouraged. In order to reduce their prices I am reducing the tax on such vehicles from 12.5% to 5%
18. Camphor, Dhoop,Loban and Kath tax free - Camphor is mainly used for religious and medicinal purpose. Similarly Dhoop and lobhan is normally used during religious ceremonies. Kath is used in ‘pan’. As these commodities are used by the common man, I exempt them from levy of VAT.
19. Reduction in tax rate of Hairpin - Hairpin is widely used by women. Last year, rate of tax on imitation jewellery was reduced from 4% to 1%. Representations were received that the rate of tax on hairpins be reduced to the level of imitation jewellery. Considering this demand, I have decided to reduce the rate of tax on hairpins from 4% to 1%.
20. Addition to Farsan list - There has been a consistent demand to reduce the high tax rate on Sabudana Chivada, Chana-chur and Khandvi. Considering this demand, I have decided to include these items in the list of Farsan .
21. HDPE Fabric Vermi Compost bed and Cotton seed oil cake tax-free - To encourage entrepreneurs who bring innovations to the agriculture sector, vermi compost beds made from HDPE fabrics are being exempted from tax. Cotton seed oil cake is used largely as cattle feed. To reduce the economic burden on farmers to a certain extent, I have decided to exempt Cotton seed oil cake from tax.
22. Relief on laundry Soaps manufactured by KVIC Units - In order to encourage employment opportunities in the rural areas, tax on sales of hand made laundry soaps manufactured by KVIC units will be exempt from tax.
23. Amendment to Bombay Motor Vehicle Tax Act, (1958) - Presently motor vehicle Tax is levied every year on Auto Rickshaws and black-yellow meter taxis. These vehicle owners are therefore required to visit the office frequently. To enable the Government to collect tax efficiently, I propose to levy one time tax on these vehicles.
Written by ntnirale on March 27th, 2010 with
comments disabled.
Read more articles on Circulars.
- [+] Digg: Feature this article
- [+] Del.icio.us: Bookmark this article
- [+] Furl: Bookmark this article
