The Hindu Business Line : Budget slashes tax on aviation fuel to 4%

Affordable housing: The Maharashtra Finance Minister, Mr Jayant Patil (right), and the Minister of State, Dr Sunil Deshmukh on the way to present the State Budget on Wednesday.

Our Bureau

Mumbai, March 19 In an attempt to give boost to air traffic in smaller cities and towns in Maharashtra, the State Government has decided reduce the VAT on sales of aviation turbine fuel.

Mr Jayant Patil, Finance Minister, said that for the next two years, VAT would be reduced on ATF from the current rate of 25 per cent to 4 per cent. However, the concessions would not be applicable for Mumbai and Pune.

Mr Patil made the announcement in the State Budget for 2008-09 presented on Wednesday.

He said that cities such as Nagpur, Aurangabad, Amravati, Akola and Nanded are emerging as developing centre for trade and industry. Purchase of fuel is an important item on the balance sheets of airlines and therefore, the VAT concessions have been made, which will encourage air travel in these interior areas, he said.

Housing

To give a boost to housing for the low-income group and middle-income group families, the Government has decided to undertake a programme of construction of 10 lakh houses in two years. It will raise resources through levy of a 25 per cent premium on developers undertaking Slum Rehabilitation Authority Schemes and grant of additional FSI for Maharashtra Housing & Area Development Authority (MHADA) colonies.

“MHADA colonies in Mumbai and across the State have been the backbone of affordable housing for the low income and middle income families. Most of these colonies were constructed several decades ago and have consumed less than one FSI. Grant of additional FSI for MHADA colonies will enable larger houses for existing residents and large-scale additional new houses to be constructed in these colonies” he said.

Tax on lands

Mr Patil said that a Bill is likely to be introduced for imposing tax on lands, which have been released due to abolition of the Urban Land Ceiling Act but remained unused by the developer. The tax will be levied on persons who obtain permission for development of land but do not carry out development within a stipulated period, he said.

With a view to curbing speculation in the real estate market, the Budget proposes to reduce the time frame for giving credit on duty for resale of flats from three years to one year.

The Budget has also proposed entry tax on air-conditioners and tiles, which are, manufactured outside Maharashtra.

The tax would be similar to the present levied on petroleum products.

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