In the Budget for 2012-13, the Hon. Finance Minister has proposed levy of tax on furnishing cloth/fabrics at last point of sale. In connection with above, the Government of Maharashtra has issued Notifications dated 27.8.2012 imposing tax on various furnishing cloth/fabrics items. The short gist of such notification is as under:

1.   Notification No. VAT 1512/CR-91(1)/Taxation 1 dt.27.8.2012 – This notification is issued under section 41(4) and it is for granting exemption from payment of tax for sales prior to last point of sale. In other words, the above furnishing cloth/fabrics is liable to tax at last point of sale that is when sold for consumption.

Notification u/s 41 for Furnishing cloth – Download Notification 

2.   Notification No. VAT 1512/CR-91(2)/Taxation 1 dt.27.8.2012 – This Notification is issued under section 42. The effect of this notification is that the retailer will not be able to take benefit of composition scheme of retailer in respect of sales of furnishing fabrics/cloth.

Notification u/s 42 for Furnishing Cloth – Download Notification

3.   Notification No. VAT 1512/CR-91(3)/Taxation 1 dt.27.8.2012 – In this Notification – Govt. has specified the list of various fabrics which are covered in the category of declared goods and covered by Sch. Entry C–101(a) of MVAT Act. The tax rate is 5% and it is effective from 1.9.2012 (List of such fabrics liable to tax are available in the notification enclosed).

Furnishing Cloth notification under schedule entry C-101(a) –Download Notification

4.   Notification No. VAT 1512/CR-91(4)/Taxation 1 dt.27.8.2012 – In this Notification – Govt. has specified the list of various fabrics which are covered in Sch. Entry C–101(b) of MVAT Act. The tax rate is 5% and it is effective from 1.9.2012 (List of such fabrics liable to tax are available in the notification enclosed).

Furnishing Cloth notification under schedule entry C-101(a) –Download Notification 

All these amendments are applicable from 1st September, 2012.

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