Maharashtra Budget Alert

The Finance Minister of Maharashtra presented the state budget for 2014-15 on 5 June 2014 in the State assembly. We have summarised below key indirect tax proposals/changes.

Proposed Amendments in Administration : The Border Check Posts shall be made operational with online facilities to ensure effective tax collection of Sales tax, State Excise. Specific rules shall be published for implementation of the same.  

Proposed Amendments in Tax Legislation :

a. Payment on Non availability of Concessional Forms: If the declaration forms ‘C’ and ‘F’ are not collected within two years from the end of the assessment year, the full differential tax will be payable at the time of filing appeal against an assessment order and no stay shall be granted beyond two years from the end of the assessment year. Stay granted earlier shall stand vacated on completion of two years from the end of the assessment year. This will apply to appeals filed from 1 July 2014.

b. Disposition of Ex- Parte Orders: Application to cancel ex-parte order will have to be disposed-off within three months by the assessing authorities, failing which the said assessment will deem to be cancelled after three months from the end of the month in which application is received.

c. Filing of Audit Report within one month: The period of one month allowed for filing of audit report beyond due date due to circumstances beyond control of dealer is proposed to be deleted.

d. Penal Interest Not Applicable till certain limits : Where the differential tax liability which arises on account of audit or investigation proceedings or on non-production of declarations, is less than 10 per cent of the tax paid with returns, additional 25 per cent interest under Section 30(4) shall not be payable.

e. Late filing fee reduction: Reduction of late fee for Value Added Tax (VAT) return from Rs 5000 to Rs 2000 for delay up to one month. For a delay beyond one month, the late fee of rupees five thousand will be applicable. All pending returns on 1 April 2014 can be filed along with payment of full tax and interest by paying late fee of rupees one thousand only.

f. VAT Registration Limits raised : Turnover limit for registration under VAT increased from Rs 5 lacs to Rs 10 lacs from the year 2013-14. Dealers whose turnover in the previous year was below Rs 10 lacs can apply for cancellation of registration certificate up to 30 September 2014.

g. VAT Audit Limits raised :Turnover limit for filing of VAT audit report increased from Rs 60 lacs to Rs 1 crore including liquor dealers.

Rate amendments/exemptions

Reduction in tax rates/fees

a.   Tax rate on cotton reduced from 5 per cent to 2 per cent.

b.  Inter-state sales of notified capital goods to department of Central or State Government liable to tax at

   5 per cent instead of 12.5 per cent.

Exemptions

a. Sales/Lease of copyrights of cinematographic films for theatrical exhibition exempted from VAT for the period 1 April 2005 to 30 April 2011. Such transactions were earlier exempt from 1 May 2011 onwards. 

b.  Aeroplane spares exempted from VAT.

Luxury Tax

Tax on Luxury as under:

Particulars	Tax  per cent
Tariff upto Rs 1000 (earlier exemption upto  Rs 750)	Nil
Tariff upto Rs 1500	4 per cent
Tariff exceeding Rs 1500	10 per cent

Exemption from Luxury tax for hotels in ‘B’ & ‘C’ zone under the Tourism Policy, 2006

Profession Tax

The basic salary exemption limit for liability under Profession Tax Act increased from Rs 5000 to Rs 7500

Stamp Duty:

Maximum Stamp duty payable on instruments executed relating to deposit of tittle deeds, pawn, pledge or hypothecation shall be Rs 10 lacs.

Please note that these amendments are based on the Budget Highlights (formal Notifications/Circulars are awaited).

CA NISHANT MUNDADA