Friday, 18 March 2016

Highlights of Maharashtra State Budget 2016


Tax payers need not visit the sales tax office to obtain registration. He shall upload all documents relating to online registration. If any discrepancy is noticed in the uploaded documents, the application shall be rejected without hearing. But, an opportunity
to comply within the stipulated period is being proposed.
If compliance is made within the said period, then the registration shall be granted from the date of the original application. However, if compliance is not made within
the stipulated period, then the application shall be rejected. Provision is also being made to cancel theregistration if false documents are furnished.

• It is proposed that if a dealer finds any mistake in the returns filed by him, then the revised returns can be filed up to the due date for filing audit report under the VAT Act and dealer may also file such revised returns multiple times.

An employer is required to deduct TDS on account of tax from the payment made to a contractor.
It is proposed that if a principal contractor awards contract to a sub-contractor, then the credit of the TDS can be transferred by the contractor to the subcontractor.
It is also proposed that the employer awarding contract shall be liable to obtain registration
for TDS under the Act and return containing TDS details shall be filed by the Employer. Penalty is also proposed for not obtaining such registration and for non-filing of return.

Profession Tax :-
 Liability of an un-enrolled person under the Profession Tax Act may extend up-to eight preceding years from the date of application. This deters many un-enrolled persons from applying for enrollment. To encourage such un-enrolled person to get enrolled, I propose a scheme under which persons applying for enrollment from 1st April 2016 to 30th September 2016 will not have to pay profession tax and corresponding penalty exceeding previous three years prior to application. This will also apply to the enrollment applications pending on 1 st April 2016. After this amnesty scheme, stringent action is proposed. A campaign will be launched against un-enrolled persons who may be liable for previous eight years with
consequent penalty and may also face prosecution.

Increase of rate of tax from 5 to 5.5% :
Speaker Sir, there is likelihood that the State may suffer revenue loss due to implemention of Goods and Ser vices Tax. The Centre has shown readiness to compensate the loss. The compensation will depend upon the revenue collection of State in the years prior
to implementation of Goods and Services Tax. The State will receive due compensation after implementation of Goods and Services Tax, if the revenue collection for the year 2016-17 is more. It is, therefore, appropriate to increase the rate of tax under VAT Act. Accordingly, I am proposing a small enhancement in lower general rate of tax. The rate of tax on goods, except declared goods, is proposed to be enhanced from 5% to 5.5%.

Extension of Tax Exemption on Essential Commodities :-
The State has exempted tax on some of the essential commodities such as rice, wheat, pulses and their flour, turmeric, chillies, tamarind, jaggery, coconut, coriander
seeds, fenugreek, parsley (Suva), Papad, wet dates, Solapuri chaddars up-to 31st March, 2016. I propose to continue exemption on these items up-to 31st March 2017. Towels are exempted up-to 31st March 2016.
Now I am proposing tax of 5.5% on terry-towels. These towels are mainly used in hotels. I propose to continue the exemption on towels used by ordinary people upto 31st March 2017. The tax exemption on currants and raisins will also continue up-to 31st March, 2017. The rate of five per cent tax on tea will now be 5.5% upto 31st March, 2017. 

Tax on Battery operated and Hybrid Buses :-
Tax at the rate of 5% is leviable on the vehicles operated on battery and solar energy. Promotion of public transport is necessary to reduce traffic congestion. In order to promote public transport, I propose to exempt from tax the buses operated on battery or
hybrid fuel, used for public transport and which are purchased by public transport undertakings.

Tax on LED Tubes :-
Energy saved is energy generated. In the last year Budget, I reduced tax from 12.5% to 5% on the LED bulbs. On the similar analogy I propose rate of tax at 5.5% on LED tubes also.

Tax on goods used by Students :-
Students are the future of this country. A tax of 5% is levied on writing instruments, pens, mathematical boxes, writing pads, colour boxes etc. used by the students. Last year, I exempted Graph book, Drawing book and Laboratory book from tax, thereby reducing
the burden of tax on goods used by students. I propose to reduce tax of 12.5% to 5% on Pencil Box, all types of gum, glues and sticks, stapler pin, tape dispenser, duster and all types of files.

5. Small entrepreneurs are an important component of Indian economy. It is necessary to encourage these entrepreneurs as they provide numerous employment opportunities. Sales tax provides various composition schemes to such small entrepreneurs for easy computation of tax liability and reduced compliance cost. I propose some changes in these composition schemes.
 The yearly turnover limit for composition scheme for retailers is proposed to be enhanced from rupees fifty lacs to rupees one crore.
 Bakery products are part of daily consumption. It is necessary to encourage this industry as it provides opportunities for self-employment. Presently the composition scheme is available to Bakeries with turnover up-to rupees fifty lacs with a composition rate
of 4%. However, this turnover also includes tax-free commodities such as bread etc. It is now proposed to exclude tax-free goods for computing the tax liability under the composition scheme for bakeries.
 Hotels, Restaurants etc. are eligible for composition without any tur nover limit. All such
registered dealers can opt for composition scheme with 5% tax. Considering that the composition scheme is meant for small dealers, I propose to enhance the rate
of composition to 8% if the turnover of food and nonalcoholic drinks in the previous year has exceeded rupees three crore.

(a) Amnesty Scheme for dues under the Acts administered by the Sales Tax Department -
On the backdrop of forthcoming Goods and Services Tax, some States like Bihar, Himachal Pradesh, Gujarat and Madhya Pradesh have announced amnesty schemes
for pending dues. The tax liabilities on the transactions in many cases is a matter of dispute. Such matters are pending in appeal before various courts. Even if matter
is finally decided in favour of dealer, he is faced with uncertainty during pendency, while if the matter isdecided in favour of Government, there is interest liability on the dealer which may make the business unviable. To address this problem and to unlock the
revenue in appeal pending before the courts, I propose an amnesty scheme for such dues under the tax laws implemented by the Sales Tax Department. The amount
so realized can be utilized for welfare measures. Amnesty shall not be available for tax dues. A dealer who has filed an appeal and the recovery of disputed dues is stayed by the appellate authority can avail amnesty scheme. The amnesty will be available if the
dealer withdraws the appeal. For periods before 1 st April 2005, if the dealer pays the disputed tax in full, then the corresponding interest and penalty shall be waived. For periods from 1st April 2005 to 31st March 2012, if a dealer pays the disputed tax amount and
25% of disputed interest, the corresponding balance interest and penalty shall be waived. Amnesty can be availed even for some of the issues pending in appeal.
The amnesty shall be available from 1st April 2016 to 30th September 2016. The procedural details of the scheme will be announced separately.

Speaker Sir, I expect net additional revenue of rupees three hundred sixty three crore from the above tax proposals. This revenue increase has been considered in the Budgetary Estimates for 2016-17.

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