Maharashtra Budget 2016- Key Provisions related to MVAT

The Maharashtra Budget for F.Y. 2016-17 was pronounced on 19th March, 2016. In the Speech the Finance Minister has made the following proposals while presenting the Budget.

Contents of Key proposals

Value Added Tax – RATE CHANGE

• Increase of rate of tax from existing 5% to 5.5%

• Reduction in Tax on LED Tubes from existing 12.5% to 5.5%. This is now at par with LED bulbs which also attract 5.5%

• Reduction in tax on stationary goods such as Pencil Box, all types of gum, glues and sticks, stapler pin, tape dispenser, duster and all types of files from existing 12.5% to 5.5%

The following are the technical changes and some other changes in the VAT Act which have been proposed and notification / circulars / clarifications are awaited:

EVASION OF TAX

• To curb instances of evasion of tax by showing sale price well below market price a concept of “fair market price” is being introduced
• It is proposed to give powers to assess a dealer on the basis of fair market price if goods are sold below market price with intention to evade tax..

REGISTRATION

• Tax payers need not visit the sales tax office for New Registration
• Dealer shall upload all documents relating to online registration and comply with discrepancy if any, if no discrepancy then registration shall be granted from the date of application.
• Provision is also made to cancel the registration if false documents are furnished

REVISION OF VAT/CST RETURN’s

• The revised returns can be filed up to the due date for filing audit report under the VAT Act i.e. for the FY 16-17 returns can be revised up to 31/12/2018
• Dealer also permitted to file revised returns multiple times.

DEEMED ASSESSMENT

• Dealers who have filed timely returns and not selected for assessment will be issued returns acceptance order [**subject to conditions]
• Dealer who have filed timely returns will deemed to be accepted as true and correct if no assessment order is issued within a period of 4 years

TECHNICAL CHANGES

• Section 56 relating to Determination of Disputed Questions [DDQ] is being deleted and a provision for Advance Ruling on stipulated questions is being made to make application before or after entering a transaction.
• All pending application relating to DDQ under the said section can be transferred to the Advance Ruling Authority.

Relevant Notification/ Circular/ Clarification on above changes and effective date are awaited, Kindly refer Budget Speech for more details on the changes.