Changes in the State Budget for 2017-18
Sanjay
Christian and Maitri Thakkar
from Sandesh Mundra & Associates
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Name of State |
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Assam |
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Bihar |
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Chhattisgarh |
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Delhi |
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Goa |
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Haryana |
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Himachal Pradesh |
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Karnataka |
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Kerala |
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Madhya Pradesh |
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Maharashtra |
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Meghalaya |
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Rajasthan |
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West Bengal |
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Andhra Pradesh |
No Changes |
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Gujarat |
No Changes |
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Mizoram |
No Changes |
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Orissa |
No Changes |
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Tamil Nadu |
No Changes |
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Telangana |
No Changes |
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Tripura |
No Changes |
STATE OF ASSAM
·
VAT:-
Ø Imposition
VAT on sale of liquor on first sale transaction within the State in unison with
the levy of excise duty on liquor as per the new Excise Rules 2016 (notified
from 1st September 2016). MRP based tax has been introduced in case of liquor.
Ø The Entry Tax pending in the Supreme Court was
effectively handled and concluded in favour of the State. This resulted in
additional revenue collection of more than Rs.400 crore
·
Luxury Tax: -
Ø It is, required to propose to exempt luxury
tax in respect of hotels and lodging houses, including home-stays, providing
residential accommodation in rural areas.
·
Entertainment Tax: -
Ø I propose
to grant 50% entertainment tax exemption for a period of three years to Permanent
multiplexes, which have commenced or commence their commercial operation during
specified period provided they give a written undertaking to the effect that
they will show Assamese/Regional Film in one of the screens, if such
Assamese/Regional Film is available for screening at a particular point of time
·
The Assam Taxation (On Specified Lands) Act, 1990 :
-
Ø I now
propose to reduce such cess to 10 paise per kg of
green tea leaf for small tea growers under The Assam Taxation (On Specified
Lands) Act, 1990.
STATE OF BIHAR
Ø Tax on goods listed in Schedule III to the
Bihar Value Added Tax Act, 2005 has been increased from 5% to 6%.
Ø Tax on unspecified goods has been increased to
15% from 14.5%.
Ø Taxable value for persons specified in Rule 2K
of Bihar Value Added Tax Rules, 2005 has been increased from 5 lakh rupees to
10 lakh rupees.
STATE OF
CHHATTISGARH
Ø Consumers will get half a percent tax relief
in case of payment through digital mode except for specified articles like
cement, steel, coal, diesel, petrol, kerosene, motor vehicle, pan masala, tobacco products. This arrangement will operate
till the time GST is implemented.
STATE OF DELHI
Ø Sanitary napkins up to Rs. 20 are tax free. In
the case of sanitary napkins above Rs. 20, government proposes to reduce the
tax rate from 12.5% to just 5%, as the government is very concerned about
hygiene of women.
Ø For Laminates, Plywood and Black Boards, MDF
Boards and Particle Boards, the tax rate is proposed to be reduced from 12.5%
to 5%.
Ø To bring Granite, Swadeshi
Kota Stone, Dholpur Stone, Gwalior
Stone Slate at par with tax rate reduced last year for marble, it is proposed
to tax them also at 5% instead of 12.5%.
Ø To give boost to the Civil Aviation
Operators, who have opted to operate under Regional Connectivity Scheme i.e.
RCS (Udan) and will ply the
fights on RCS routes (involving Delhi) between an identified pair of origin and
destination airports/helipads within India pursuant to the scheme satisfying
the prescribed conditions, it is proposed to reduce the VAT rate to 1% from
existing 25% on their purchases of Air Turbine Fuel (ATF) in Delhi.
STATE OF GOA
Ø Rate enhance of VAT on Motor Sprit to 15%
Ø Reimburse VAT on aviation turbine fuel, in
excess of 01%, a detail scheme will be formulated in this regard
Ø VAT exempt on sale of electric vehicles
Ø Sale of
Mineral Ore in Schedule ‘G’ of the Goa VAT Act, 2005; where by input tax credit
was not made applicable.
Proposed to allow input tax credit on sale of mineral ore by omitting this
entry from Schedule ‘G’
STATE OF HARYANA
Ø No changes in the present rates of taxes under
the Haryana Value Added Tax (HVAT) Act, 2003.
Ø In fact, the State Government has
decided to make bio diesel (B-100) and solar devices and parts used in
installation of solar power projects tax-free by exempting them from the levy
of VAT.
STATE OF HIMACHAL
PRADESH
Ø A
self-assessment scheme for dealers having turnover of Rs. 2 Crore
to be framed.
Ø Lump sum tax payment scheme for traders upto a turnover of Rs. 40,00,000.
Ø Entry Tax
to be reduced from 1 % to 0.5 % for existing industries only.
Ø Additional Good Tax on iron, steel &
plastic goods will be reduced.
Ø The revised rates of electricity duty for new
industries will also be extended to new hotels.
STATE OF KARNATAKA
Ø The tax exemption on paddy, rice, wheat,
pulses and products of rice, Ragi Rice (processed Ragi) and wheat will continue. Further flour of Navane, Same, Aaraka and Baragu Siridhanyagalu) & husk
of coconut and pulses will also be exempt from tax.
Ø Amendments to section 40 of the KVAT Act, 2003
to extend the period of limitation for assessments or reassessments pertaining
to tax periods of 2012-13 and 2013-14 by one year. Further amendment to section
40 to exclude period taken for disposal of revision proceedings in computing
the period of limitation for assessment or reassessment.
Ø A Karasamadhana
scheme is proposed to waive 90%of penalty and interest on payment of full tax
and remaining 10% of penalty and interest by 31st May 2017.
STATE OF KERALA
VAT Amnesty Scheme:-
Ø As in KGST, they intend to launch an extensive
amnesty scheme for redressing the disputes by granting the relief from
excessive penalties and interest.
Ø The following amnesty scheme will be
implemented in the Value Added Tax Act.
1)
In the case of VAT dealers, if the tax arrears of the assessment years from
2005-06 to 2010-11 is completely remitted, the interest thereon and 70% of the
penalty amount and interest on penalty, shall stand waived.
2)
All arrears pertaining to an year shall be settled
together
3)
An assessee opting to settle arrears under this scheme shall withdraw all
cases, revision and appeals pending before any forums.
4)
Tax arrears and interest shall be calculated as on the date of submission of
application.
5)
Arrears under CST Act for the above period can also be settled under this
Scheme.
6)
The last date for filing option under this scheme shall be 30th June, 2017.
Amount reckoned under the scheme shall be paid by equal instalments on or
before 31st December, 2017.
Works Contract :-
Ø
There were certain disputes in determining the nature of works contract
involved in the installation of kitchen cabinet works, aluminium fabrication
works, air-conditioning plant installation. In these cases, the tax determined
under compounding scheme was re-assessed and taxed at scheduled rate. Interest
and penalty were also imposed. In cases were compounded tax was paid by the
contractors for such contracts, they shall be exempted from paying tax at
scheduled rate, provided all the purchases are from within the State and such
contractors shall pay 2% tax for total contract amount over and above
compounded tax already paid. This scheme will be applicable for the assessments
up to the FY 2014-15.
Concessions:-
Ø
The previous Government had exempted tax under VAT for natural rubber and its
variants for the period from 20th December2014 to 1st March 2015 by
notification. But necessary provisions to this effect were not incorporated in
the Finance Act. Hence, rubber dealers are liable to pay tax and interest for
the above period. It is announced that natural rubber and its variants is
exempted from tax for the period from 20th December to 31st March 2015.
Ø
The tax rate for solar energy devices and spare parts is currently 1%. But
14.5% is levied for the installation of such devices, considering it as works
contract. The tax rate of such works will also be fixed at 1%. This will have
retrospective effect from 01.04.2013 from the date on which the tax rate of
solar energy devices was reduced to 1%. But, tax paid during this period based
on the assessment done will not be refunded.
Ø
Packing materials used in exporting goods is liable to be taxed. The packing
materials used in exporting goods will be exempted from tax, subject to
conditions, for the period from 2005- 06 up to the year on which the Division
Bench of the Hon’ble High Court has rendered its judgment in such cases. Tax
already paid during this period will not be refunded.
Presumptive Tax
Dealers:-
Ø In 2016-17 budget, an amnesty scheme was declared for presumptive tax
dealers in VAT Act. To settle the cases as per the scheme, total turnover will
be calculated adding 5% gross profit on unaccounted purchases along with the
sales turnover declared as per return. If the total turnover calculated for an year by adding 5% gross profit on unaccounted purchase is
below the threshold limit as per Sec.6 (5), then such dealer shall pay tax at
the rate of half percent. If the turnover thus calculated is above the
threshold limit as per Sec.6 (5) and up to rupees one crore,
then the dealer shall pay tax at the rate of 1% for the turnover above the
threshold limit. And if the turnover is above rupees one crore,
the dealer shall pay tax at the rate of 2% for the turnover above rupees 1 crore and 1% for the turnover in between threshold limit
and up to rupees one crore. In general, 0.5% shall be
paid for the turnover up to threshold limit. Option to settling under the
scheme shall be submitted before the assessing authority on or before 30th
June, 2017. The assessing authority shall intimate the applicant, the amount to
be paid as per the scheme within 15 days from the date of receipt of the
option. The applicant shall pay 30% of the amount within 15 days from the date
of intimation and balance amount on or before 31st December, 2017. The dealer
shall opt this scheme for all those years for which he
had unaccounted purchases. Assessment and revenue recovery steps will be
intensified for those who have not opted under this scheme. No statutory
re-examination or refund will be allowed incases
settled under this scheme. This scheme is also applicable for those dealers who
have opted amnesty scheme for 2016-17 but had defaulted payments. There will be
no other changes in the conditions prescribed under the amnesty scheme for
2016-17.
STATE OF
MADHYA PRADESH
Ø The POS
machine will be exempted from tax and also stamp duty on its agreement will
also be exempted.
Ø
For the heavy good vehicles weighing more than 12000 kilogram, VAT rate will be
changed from 14% to 12%.
Ø
The airports and small landing areas excluding of Indore, Bopal,
Gwalior, Jabalpur, Khajuraho where sale of A.T.F on
which VAT rate of 4% will be converted to 1%.
Ø
The Vat rate at items of A.T.F on Gwalior,
Jabalpur, Khajuraho airports will be taxable at 4%.
Ø
The Vat rate at items of A.T.F on Indore and Bopal
airports on which present rate is 4% will be taxable at 25%.
Ø
On the basis of authentication of Handicap Perspective Authority vehicles made
available will be taxed at 5%.
Ø
Central Sales Tax Act, Entry tax Act, Madhya Pradesh tax on Entertainment,
Luxury and Advertisement tax will be levied continuously till GST comes.
Ø
In
order to leave any property right in family’s property by any family member,
previously tax was levied at 2.5% now it will be taxable at 0.5%. Further
indemnification bond on which tax at 0.5% is leviable
is now taxable at flat Rs 1000.
STATE OF MAHARASHTRA
Tax Concessions:-
Ø Sugarcane
Purchase Tax for the year 2016-17 exempted to give fair and remunerative price to
the farmers. The condition regarding export of sugar for exemption for the year
2015-16 is removed.
Ø VAT
exemption to Amsul alongwith
exemption to essential commodities like rice, wheat, pulses and its flour and
also turmeric, chillies, tamarind, jaggery, coconut,
coriander seeds, fenugreek, parsley (suva), papad, wet dates.
Ø VAT
exemption on Solapuri chaddar
and towels continues.
Ø VAT on Geo
Membrane required for farm pond reduced from 6% to 0%.
Ø To examine
the fertility of soil for farming, VAT on Soil Testing Kit reduced from 13.5%
to 0%.
Ø VAT on Milk
Testing Kit for checking adulteration of milk reduced from 13.5% to 0%.
Ø VAT on
Aviation Turbine Fuel for flights under the Regional Connectivity Scheme
reduced from 5% to 1%.
Ø VAT on Card
Swipe Machine for cashless transactions reduced from 13.5% to 0%.
Ø VAT on Gas
and Electric Incinerators reduced from 13.5% to 0%. (B)
Tax concessions to
Industries:-
Ø VAT
exemption on Sweet-Corn processing industry from 1st April 2005 to 31st March
2016.
Ø VAT
exemption on Textile Processing industry from 8th April 2011 to 30th April
2012. Approximately 200 units would benefit.
Ø VAT exemption
on Yarn Sizing and Warping industry from 1st April 2005 to 31st March 2016.
Approximately 300 units would benefit.
Increase in Taxes:-
Ø VAT rate of
23.08% on MRP of country and foreign liquor increases to 25.93%.
Ø Tax on
weekly lottery increases from Rs.70,000 to Rs.1 lakh.
Administrative
changes:-
Ø
Establishment of three new benches of Maharashtra Sales Tax Tribunal.
Ø VAT appeal
10% part payment necessary subject to maximum payment of Rs.15 cr.
Ø VAT dues
can be recovered from the Directors of private company.
Ø Profession
Tax assessment for unregistered period reduced from eight years to four years.
STATE OF
MEGHALAYA
Ø
Revise upward the VAT on liquor.
Ø
Rationalize the tax structure on cigarettes and bidis.
STATE OF
RAJASTHAN
Ø
Deemed Assessment Scheme for VAT, Entry Tax, Luxury Tax and Entertainment Tax
to be notified for the assessment year 2015-16 and subsequent years.
Ø
Relief to the Saraffa, Gems and Stone, Petroleum
Retail Outlet and Tent dealers who had opted for composition scheme but could
not comply with conditions of the compositions schemes.
Ø Provisions for waiver of interest, penalty and late fees
proposed to be incorporated under the Luxury Tax Act.
Ø Provisions for waiver of interest and penalty proposed to be
incorporated under the Entertainment Tax Act.
Ø Hard copies of the appeal to be accepted by Appellate Authority
for the period in which dealers were unable to file online appeal.
Ø Time limit extended for correction of the online generated
declaration forms.
Ø In case of award of additional work or receipt of additional
payment, period of 60 days extended to avail the benefit of the exemption
certificate already issued.
Ø Date for correction of Form VAT-40E extended up to 31.03.2017
for the year 2015-16 to give relief to the works contractor.
Ø Time extended up to 15.04.2017 for filing of revised VAT-11 for
the year 2015-16.
Ø Exemption of Entry Tax on the yarn brought
into the state exclusively for job work.
Ø For giving relief to the Micro and Small enterprises,
composition scheme for such manufacturers having turnover up to Rs. 50 lac with the rate of composition fee 2% introduced.
Ø Combination-Plier upto the value of Rs. 80/- exempted from VAT.
Ø To give benefit to Micro and Small Enterprises, explanation is
given for non-clubbing of investment in different enterprises setup under the
same ownership.
Ø Those industrial units availed the benefit under the Sales Tax
Incentive Scheme, 1987 and who could not comply with the condition of
maintaining average production for next 5 years, which are presently closed or
declared sick under BIFR and have not sold their land for purposes other than
industrial use, given relief under the CST Act.
Ø Exemption of Entertainment Tax on online
booking service charges.
Ø Electricity Duty, Water Conversation Cess and Urban Cess
exemption given to Jaipur Metro Rail Corporation for
operation and maintenance.
Ø No new tax in VAT, Entry Tax, Luxury Tax and Entertainment Tax except increase of VAT on cigarette by 15%.
Ø VAT on ATF reduced to 1% under Regional Connectivity Scheme of Government of India to promote tourism in the State.
Amnesty Schemes:-
Ø Amnesty Schemes for VAT, Entry Tax (Goods) and Entry Tax (Motor Vehicles) notified.
STATE OF WEST
BENGAL
Threshold under
VAT:-
Ø In order to
give relief to the small businesses, in 2015 we increased the threshold for payment of tax in one go from Rs. 5 lakh to Rs. 10 lakh. It
is proposed to increase the threshold from Rs. 10 lakh to Rs. 20 lakh.
Registration,
Report & Refund:-
Ø It is
proposed to completely dispense with the requirement of submitting hard copies
of registration documents to the VAT offices. This will greatly help small
businesses
Ø It is
proposed to completely abolish the provision of submission of separate VAT audit
report. Instead the dealers may submit the income audit report which will be
accepted as a VAT audit report as other purposes. As a result of this, more
than 30,000 small businesses will be benefitted from this financial year.
Ø It is
proposed that all pending refund cases will have to be disposed of and enclosed between 31st December 2017.
Composition
scheme:-
Ø Presently,
only traders with annual turnover to less than Rs. 50 lakh are covered under
the Composition Scheme in which there is a nominal VAT liability. It is
proposed to bring small manufacturers whose annual turnover is less than Rs. 50
lakh under the Composition scheme. As a result these manufacturers will have to
pay only a nominal tax. 33,000 small manufacturers will be benefitted from this
measure.
Tax relief:-
Ø It is
proposed to exempt some environment-friendly items like Bio-diesel, Bio-mass Bricket, Solar water heater, plates and cups made up of Saal leaf, tiles of terracotta, etc. I also propose to
exempt some items for common use like kerosene stove, hair band and hair clip,
etc
Ø It is
proposed to extend the exemption on payment of primary education and rural
employment cess on tea for a further period of one year upto
31st March 2018.
[Views expressed are strictly personal]