Trade Cir. No.9T of 2012
SUB: Amendments to the schedule entries under the Maharashtra Value Added Tax Act,2002.
REF: 1. Notification No.VAT.1512/C.R.40/Taxation-l-dt.31/03/2012.
2. LA Bill No.VII of 2012 dt. 11/04/2012.
3. Mah. Act No.VIII of 2012 dt. 15.04.2012.
4. Notification No.VAT.1512/C.R.40/Taxation-l-dt.20/04/2012.
5. Notification No.VAT.1512/C.R.49/Taxation-l-dt.20/04/2012.
6. Notification No.VAT.1512/C.R.55/Taxation-l-dt.25/04/2012.
To give effect to the Budget proposals certain changes in the schedule entries under the Maharashtra Value Added Tax Act,2002 are made by the above referred notification. These changes in tax rates are effective from 1st April 2012 (except otherwise stated) and are briefly explained below.
2. AMENDMENT TO SCHEDULE ‘A’
The exemption to the commodities under entry 9A was available till 31st March 2012. The said period is further extended upto 31st March 2013.
L.P.G, supplied in cylinders containing upto 14.5 kg. of L.P.G. for domestic use was tax free under entry 21A of Schedule A. L.P.G not conforming to the specification in the entry 21A was taxable. This entry 21A has now been deleted w.e.f 1st April 2012. A new entry in Schedule C has been introduced w.e.f 1st April 2012 – “Liquefied Petroleum Gas for domestic use”. While making L.P.G for domestic use taxable under the new entry, the restriction about the capacity of upto 14.5 kg. has been removed. The entry is explained hereinafter while discussing amendments to Schedule C appended to the MVAT Act.
Entry 45A, as existing prior to amendment, covers unmanufactured tobacco and biris falling under Tariff Heading Nos. mentioned in the entry. There is an entry D-12 under Schedule D which pertains to tobacco, manufactured tobacco and products thereof excluding those to which entry 45A of Schedule A applies. The effect of amendment to biris and tobacco (unmanufactured and manufactured) is dealt with in detail while explaining amendment to entry 3.2 of Schedule D. The amendment to this entry is explained in brief as follows:
i. Sub-entry (a) of entry 45A is for unmanufactured tobacco covered by the Central Excise Tariff Heading No. 2401 mentioned for the purposes of this sub-entry. Unmanufactured tobacco sold in packets under a brand name is not covered by the aforementioned Tariff Heading for unmanufactured tobacco. Therefore, tide same were never covered by sub-entry (a). However, several instances of misclassification of unmanufactured tobacco sold in packets under the above er added to the entry to clarify the position. The addition of the “Explanation” does i(ot in any way mean that the same becomes applicable now. The “Explanation” does not change the taxability of such unmanufactured tobacco sold in packets under a brand name. It only seeks to reiterate the existing position more clearly.
ii. Sub-entry (b) of this entry pertaining to Biris has been deleted. Therefore, Biris would now be taxable w.e.f 1st April 2012.
The exemption to the commodities under entry 51 was available till 31st March 2012. The said period is further extended upto 31st March 2013.
A new entry is added providing exemption to a Tel Ghani Unit registered under the Khadi and Village Industries Board constituted under the Bombay Khadi and Village Industries Act, 1960. The exemption is in respect of edible oil and oil cake manufactured and sold by the Tel Ghani Unit upto a turnover of rupees twenty lakh in a financial year. The entry prescribes a condition that the unit shall be certified by the Joint Commissioner of Sales Tax(Registration) in Mumbai and the concerned Joint Commissioner of Sales Tax(VAT Administration) in the rest of the State.
A new entry has been introduced to provide exemption from tax to sales of “Purak Poshan Aahar” by way of supplies made to the Aanganwadi Centres under the Integrated Child Development Scheme as specified in the Government Resolution, Women and Child Development Department No.ABV-2008/CR-51/KA-5 dated 24.08.2009.
3. AMENDMENT TO SCHEDULE ‘C’
1. Entry 4(a)
The rate of tax in respect of cotton yarn is reduced from 5% to 2%. Cotton yarn sold in hank continues to be tax free, being covered by entry 17 of Schedule A,
2. Entry 10
Entry 10 pertaining to “Bamboo” has been amended to include “bamboo products” in the entry. Bamboo products are now taxable @5%.
3. Entry 12
Entry 12 pertains to beedi leaves. The entry is now amended w.e.f 1st May 2012 to include “beedi”. Thus, beedis which were tax-free under schedule entry A-45A(b) upto 31st March 2012 would be taxable @5% from 1st May 2012.
4. Entry 41
In the Entry 41 for Gypsum of all forms and descriptions, gypsum boards were excluded from the entry. Now, “plaster of paris” is also excluded from the entry. Thus, “plaster of paris” is now taxable @12.5%.
5. Entry 58(b)
As mentioned earlier, L.P.G supplied in cylinders containing upto 14.5 kg. of L.P.G. for domestic use was tax free under entry 21A of Schedule A. This entry has now been deleted. A new entry – clause (b) in entry 58 of Schedule C has been introduced w.e.f 1st April 2012 – “Liquefied Petroleum Gas for domestic use”. While making L.P.G for domestic use taxable under the new entry, the restriction about the capacity of upto 14.5 kg. has been removed. The rate of tax on such L.P.G for domestic use is, however, kept at 3%. L.P.G for commercial use continues to be taxable @12.5%.
6. Entry 75A
A new entry has been introduced for poultry machinery and equipments as may be notified. This is an enabling entry under which a notification has been issued on 20.04.2012. Thus, poultry machinery and equipments which are notified will be taxable @5%. Needless to say, poultry machinery and equipments which are not notified would continue to fall in the residuary schedule entry E-1, thereby taxable @12.5%.
7. Entry 82A
A new entry has been added for ribbon, bow and kajal which would now be taxable @5%. Thus, ribbon, bow and kajal which were taxable @12.5% earlier would be taxable @5% w.e.f 1st April 2012.
8. Entry 83A
A new entry has been added for rock salt which would now be taxable @5%. Thus, rock salt which was taxable @12.5% earlier would be taxable @5% w.e.f 1st April 2012.
9. Entry 85A
A new entry has been added for safety Helmets, taxable @5%. Thus, safety Helmets which were taxable @12.5% earlier would be taxable @5% w.e.f 1st April 2012.
10. Entry 99(a)
Sub-entry (a) of entry 99 covers umbrella except garden umbrella. Now, Raincoats are also included. Thus, raincoats would now be taxable @5%.
11. Entry 104(c)
An entry for writing and mathematical instruments already exists in entry 104 of Schedule C. The scope of this entry for educational aids and apparatus is further extended by adding sub-entry (c) to include – Writing boards or writing pads, drawing boards, black boards, green boards, white boards, examination pads, foot rulers, erasers, glitter pens, sketch pens, staplers, pencil leads, oil pastels, drawing charcoals and envelopes. The aforementioned items would now be taxable @5%.
12. Entry 107(11)(f)
A new clause (f) is added to sub-entry (11) of entry 107. This clause covers raw, semi cooked, semi processed, readymix and ready to cook preparations, sold in sealed containers. However, this clause specifically excludes ready to eat food and those already covered by clauses (a) to (e) of this sub-entry. The Explanation to this entry provides that the items in clauses (a) to (e) will not be covered by the scope of the entry when those are served for consumption. The new clause (f) was included in the Explanation by an amendment. Thus, the items covered by clause (f) when served for consumption would stand excluded from the scope of this entry.
13. Entry 108(l)(b)
The exemption to “Tea in leaf or powder form including instant tea” under this entry is extended further upto 31st March 2013.
14. Entry 108 A
Entry 108 A pertains to – “Dry fruits excluding cashew kernels and cashew nuts and those to which entry 59 of SCHEDULE A applies”. This entry has been substituted thus – “Dry fruits excluding Raisins and Currants”. The amendment would, in effect, mean that –
i. All Dry fruits except Raisins and Currants would be taxable @5%.
ii. Raisins and Currants are tax-free under entry 59 of Schedule A during the period from the 1st June 2010 to 31st May 2012.
iii. Raw cashew nuts remain to be covered by entry 7 of Schedule C, thereby attracting tax (2)5% thereon.
15. Entry 115
A new entry has been introduced for “Adult diapers and Sanitary which would now be taxable @5%.
4. AMENDMENT TO SCHEDULE ‘D’
1. Entry 11
Entry 11 pertains to Aviation Turbine Fuel (Duty paid) when sold within Maharashtra excluding the geographical limits of Brihan Mumbai Corporation and Pune District. The period clause upto 31st March 2012 mentioned in this entry has been deleted. Thus, there is no restriction in respect of the period for the applicability of this entry. Further the rate of tax in respect of this entry has been increased from 4% to 5%.
2. Entry 12 – Position of taxation of tobacco and beedi
Entry 12 of Schedule D was introduced w.e.f 01.07.2009. It pertains to “Tobacco, manufactured tobacco and products thereof including cigar and cigarettes but excluding those to which entry 45A of Schedule A and entry 101 of Schedule C applies”. Entry 45A of Schedule A was introduced w.e.f 01.04.2007. This entry covers unmanufactured tobacco covered by Central Excise Tariff heading 2401 and biris falling under the Tariff Heading Nos. mentioned in the entry.
Prior to introduction of entry 12 in Schedule D, i.e during the period 01.04.2007 – 30.06.2009, there was no specific entry for tobacco and its products which were not covered by entry 45A of Schedule A. Therefore, tobacco and its products not covered by entry 45A were covered by entry E-l, liable to tax @12.5%.
With effect from 1st April 2012, entry 45A of Schedule A was amended by notification dt.31st March 2012 to exclude Beedis. Since, entry 12 of Schedule D seeks to keep beedis outside the purview of the entry, a consequential amendnment from 1st April 2012 was also made to entry D12 so that beedis and tobacco to which entry 45A of Schedule A applies would be excluded from entry D12. A new entry for beedis was introduced in Schedule C, namely C-12(b), w.e.f 1st May 2012. Thus, during the period from 1st April 2012 to 30th April 2012, Beedis, being so excluded from both Schedule A and D, fell within the scope of entry E-l, thereby liable to tax @12.5%. In view of the specific entry 12 of Schedule C, beedis are liable to tax @5% from 1st May 2012 onwards.
Unmanufactured tobacco repacked and sold in packets as per Note to Chapter 24 of Central Excise Tariff is not unmanufactured tobacco and therefore will not be covered by the Central Excise Tariff Heading No. 2401 mentioned for the purposes of the sub-entry (a) of entry 45A of Schedule A. An Explanation added to this effect to entry 45A by notification dt.31.03.2012 is only clarificatory in nature. It is made clear that unmanufactured tobacco repacked and sold in packets under a brand name fall outside the scope of entry 45A. Entry D-12 being introduced w.e.f 01.07.2009, such unmanufactured tobacco sold in packets under a brand name was covered by this entry D12 from 01.07.2009 to 30.04.2012. Prior to 01.07.2009 i.e from 01.04.2007 to 30.06.2009, there being no specific entry, it was covered by this residuary entry E-l, thereby liable to tax @ 12.5%.
From 1st May 2012, entry D12 was further amended by notification dt.25th April 2012 to exclude unmanufactured tobacco sold in packets under a brand name, beedis and those covered by entry 45A from the entry. Therefore, such unmanufactured tobacco sold in packets under a brand name would be covered by the residuary entry E-l w.e.f 1st May 2012.
Unmanufactured tobacco sold in packets under a brand name being not covered by entry 45A will be liable to tax @20% from 01.07.2009 to 30.04.2012 and from 01.05.2012 onwards, being excluded from entry D12, will be covered by residuary entry E-l, thereby liable to email@example.com%.
A summary of tax position of beedi and tobacco from 01.04.2007 is given below :
|Unmanufactured tobacco sold in packets under a brand name|
|01.07.2009 – 30.04.2012||D-12||20%|
5. This circular cannot be made use of for legal interpretation of provisions of law as it is clarificatory in nature. If any member of the trade has any doubt, he may refer the matter to this office for further clarification.
6. You are requested to bring the contents of this circular to the notice of the members of your association.
Commissioner of Sales Tax,
Maharashtra State, Mumbai