The Maharashtra government has marginally increased the general VAT rate from 5 to 5.5 per cent in the State budget. The increase is in anticipation of revenues losses when Goods and Services Tax (GST) gets implemented.
Finance Minister Sudhir Mungantiwar said in his budget speech that there is a likelihood of the State suffering revenue loss from the implementation of Goods and Services Tax and said that the compensation from the Centre will depend on the revenue collection of States in the years prior to implementation of GST.
While this makes goods and services in the State dearer by 0.5 per cent, there are other product-specific changes in the tax structure.
Vehicle tax structure For two- and three-wheeler vehicles for personal use, Mungantiwar has devised a new tax structure, under which vehicles up to 99 cc will be taxed at 8 per cent. For vehicles from 100 cc to 299 cc the rate will be 9 per cent and for 300 cc and above the rate will be 10 per cent.
Company-owned vehicles will be taxed at double rate which means the applicable tax will range between 16 per cent and 20 per cent. This is bad news for individual owners as the existing rate is at 7 per cent for all type of two and three wheelers.
Companies such as Domino’s, which own their own fleet of two-wheelers, will however pay lower tax as the existing rate is at 21 per cent.
The Finance Minister has increased tax on coconut oil from 5 to 12.5 per cent on bottles up to 500 ml. On slabs of marble and granite tiles, which are imported from other States, an entry tax has been levied.
Tabs on e-commerce Keeping e-commerce companies under tight control, Mungantiwar said, “It is proposed to periodically obtain information from e-commerce companies regarding sales-purchase transactions made on the portal. A penalty shall be imposed upon a portal for not furnishing the information.”
Profession tax On the payment of profession tax, eligible taxpayers who have not paid profession tax in the preceding eight years will be held liable to pay taxes. However, he has also introduced an amnesty scheme, whereby those enrolling between April 1 and September 30 of the next fiscal will get tax and penalty waiver up to three years.
A campaign will be launched against persons who have not enrolled for paying profession tax. They could face penalty and prosecution under the law, he said. The tax proposals will result in additional revenue of ₹363 crore for the State exchequer.
₹25,000 crore to revive farm sector
To tackle recurring droughts in Maharashtra, the State budget has made an outlay of ₹25,000 crore for the agriculture sector and various schemes related to farmers.
In addition, relief package of over ₹3,000 crore has also been made available to the stressed farmers of the State.
Sops to sugar mills
As sugar industry in Maharashtra is facing difficulties, the Finance Minister has exempted sugar mills from paying Sugarcane Purchase Tax for 2015-16. However, exemption will be available to only those sugar factories that met the export obligations as per State Government Policy.
Finance Minister Sudhir Mungantiwar said in his budget speech that the State has been facing severe drought conditions for last three successive years. The State government is determined to extend maximum support to the farmers, he said.
Mungantiwar said that in order to assist the farmers suffering from drought and other natural calamities during the year 2015-16, a substantial increase was been made in per hectare relief package and a provision of ₹5002.82 crore has been made.
“By way of precaution, an outlay of ₹3,360.35 crore has been made for the year 2016-17,” he said.
He said that the United Nations Organisation (UNO) has declared 2016 as ‘International Year of Pulses’. An outlay of ₹80 crore is proposed under Rashtriya Krishi Vikas Yojana (RKVY) to enhance the output of pulses and oil seeds through various programmes.
The budget also reflects the ideology of the BJP. Its pet programme of protecting the cow and its progeny finds mention in the budget.
‘Govardhan Govansh Raksha Kendra’ (Cow lineage protection centres) will be established in 34 rural districts for rearing of non-lactating and unproductive cattle breed with the participation of experienced NGO. A one-time grant of ₹1 crore will be provided for the project.
During 2016-17, an outlay of ₹34 crore is proposed for Govardhan Govansh Raksha Kendra,” he said.