Maharashtra hikes VAT rate from 5% to 5.5%

Motor Vehicle Tax enhanced on two wheelers and three wheelers owned by individual

The finance minister, Sudhir Mungantiwar of Maharashtra government presented state budget in the state assembly for 2016-17. The finance minister has announced the hike in VAT tax rate to 5.5% from 5%. The major budget proposals are as follows:

Tax raised

* Motor Vehicle Tax enhanced on two wheelers and three wheelers owned by individual. Tax to be based on engine capacity -

* Institutional and Imported Vehicles to be subjected to double the rate of tax.

* The VAT composition tax rate raised from 5% to 8% to hotels and restaurants having turnover of sales Rs 3 Crore and more.

* Levy of Entry Tax on Marble and Granite slabs.

* Increase in Lottery Tax on the draws of Lotteries.

* VAT tax on Coconut hair oil sold in pack upto 500 ml enhanced to 12.5%.

VAT exempted

* Warping and Sizing of Yarn for promoting the TextileIndustry.

* Mammography machines used for detection of breast cancers exempted.

* Retrofit kit fitted to vehicles for physically handicapped

* Bamboo Products excluding Bamboo furniture.

VAT reduced

* Sterile water for injections from 12.5% to 5.5%.

* LED Tubes reduced from 12.5% to 5.5%.

* Pyrolysis Oil reduced from 12.5% to 5.5%.

* Steel Wire Mesh, Barbed Wire and Chain links reduced from 12.5% to 5.5%.

* Pencil Box, Stapler pins, Dusters, Gum and Gum-sticks used by student reduced from 12.5% to 5.5%.

Exemptions

* Levy of Sugarcane Purchase Tax for 2015-16 for sugar exporting factories

* Profession Tax exempted to armed personnel of CRPF and BSF.

Other Measures

* Establishment of Advance Ruling Authority for speedy disposal of disputed questions under Sales Tax Laws.

* Input Tax Ledger to be made available to the tax payer.

* Pilot Project will be started by Sales Tax Department for implementation of Digital Billing system.

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