Surplus budget retains standard VAT rate at 12.5%; state sales tax revenue expected to grow 26% from last year
The Maharashtra government has decided to levy a uniform stamp duty of 0.005% on all transactions in the stock and commodity exchanges, including transactions of securities, futures, delivery and non-delivery based transactions. This was announced by the state's finance minister Ajit Pawar in the annual budget presented on Wednesday.Maharashtra's annual budget shows asurplus of . 58 crore and has a revenue target of . 1,21,503 crore for the fiscal 2011-12. The size of the annual plan has been set at . 41,500 crore. The budget has retained the standard VAT rate at 12.5%, while state sales tax revenue is expected to increase 26% from last year.
Though the finance minister did not specify the revenue projection from the 0.005% stamp duty levied on stock and commodity transactions, he said the move will simplify collection of duty on all such transactions. At present, stamp duty is levied at different rates depending on whether turnover is delivery-based, non-delivery-based, or proprietary. Brokers are required to pay 0.01% for the first category, 0.002% for the second and 0.001% for the third.
The state government has decided to make some amendments in the Bombay Stamp Act 1958 to increase the revenue from stamp duty by 31% in the state. Transactions of transfer of longheld tenancy rights of house property (extension of lease) will now be liable for stamp duty at market value.
The budget proposed to levy a new 5% tax on sale of telecast rights of various events, including cricket matches and entertainment programmes like award shows. It also proposed to increase the rate of tax on soft drinks to 20% from 12.5% and changed excise duty formula for country liquor, Indianmade foreign liquor, and beer in order to increase revenue. The minimum rate of excise duty will be increased to . 95 per proof litre for country liquor, . 240 per proof litre for foreign liquor, . 33 per bulk litre for mild beer, and . 42 per bulk litre for fermented beer. The budget has also proposed change in the VAT structure for liquor. Instead of charging 25% VAT at each stage with deduction for set-off, now 50% VAT will be charged only once at the sale stage based on the sale price of the liquor.
Some amendments for procedures were also proposed in the MVAT Act. These include amendments of revised returns, providing for deposits instead of advance payments for voluntary registration, changes to provisions of refund application to be filed by dealers making interstate sales, etc. The budget proposed stern action against those convicted in Hawala dealings, with two years imprisonment. The budget also proposed . 1,440 crore for providing basic infrastructure facility to the urban poor and . 2,500 crore for various infrastructure schemes under the JNNURM. It has proposed . 2,749-crore expenditure for building roads in rural areas, . 5 crore for construction of a floating jetty at Gateway of India, and . 162 crore for airport upgradation.
In order to promote air traffic in various districts, tax on aviation turbine fuel has been kept at 4% in all districts of the state, except Mumbai and Pune. This scheme of concession will continue till March 31, 2012. The film industry breathed a sigh of relief as the finance minister proposed to abolish the tax on copyright of Bollywood films.
The budget proposed a subsidy of . 2,500 crore to farmers for their electricity bills. Wheat, rice, pulses, flour, turmeric, chillies, tamarind, gur, coconut, cummin seeds, wet dates, fenugreek, and papad have been exempted from tax till March 31, 2012. Domestic liquefied petroleum gas (LPG) will also be exempted from state tax. The finance minister also proposed change in recovery procedure for sugarcane purchase tax. Instead of recovering the entire tax in the crushing season, the purchase tax will now be recovered every month from the sale proceeds.
MONEY TALK: Maharashtra CM Prithviraj Chavan (left) & deputy chief minister and finance minister Ajit Pawar (extreme right) with their colleagues at Vidhan Bhavan shortly after the presentation of the budget in the House.
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