The Opposition alleged that notification seeks to increase VAT on sugar and cloth material, while the items are covered under Central VAT Act. The Maharashtra Government’s notification to increase value added tax (VAT) by one per cent on 90 commodities including oilseeds, rice, and pulses and converting an Ordinance, which will further amend the Maharashtra VAT Act, has run into rough weather.

On Thursday, the first day of the budget session of the legislature, Opposition parties made a loud protest over the move. They questioned the reason for promulgating the Ordinance in February when the legislature was to be in session by March. They also pointed that the notification was issued on March 10, which was just a week prior to the beginning of the session.

‘Proviso flouted’

The Leader of the Opposition, Mr Eknath Khadse (BJP), said that in the current VAT Act, which came into force in 2005, there was a proviso (a clause which embodies a condition or stipulation) which lapsed in 2007. The proviso empowered the government to change the law by the way of an Ordinance between 2005-07 and not later.

Therefore, promulgation of the Ordinance was illegal, he said. The State Government must first introduce the Bill in the session, which will empower them to change the Act. Today it does not have the power under the law, he added.

Mr Khadse also pointed out that the March 10 notification seeks to increase VAT on sugar and cloth material, while both the items are covered under Central VAT Act and not under State VAT Act. If the government goes ahead with amending the Act, the BJP will take the matter to court, he said. Mr Devandra Phadanavis of the BJP said that the Act itself does not allow the government to amend it due to the proviso. Therefore, amending it would amount to an ‘ultra vires’- which is against the sprit of the Constitution.

Govt position

Maintaining the position of the government, the Finance Minister, Mr Sunil Tatkare, said that the government could amend the Act. Other States have also increased the VAT by one per cent on certain commodities, he said.

The Speaker of the House, Mr Dilip Valse Patil, said that in view of the opposition to the Vat Act, his decision of allowing or disallowing discussion on the Act would be conveyed to the legislature on Friday, he said.


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June 2021