Sales Tax Review

March  2007

Important Trade Circulars

No.Sr.DC(A&R)/Adm-3/Notification/2006

Gentlemen/Sir/Madam,

Essential commodities covered under some entries of schedule ‘A’ of Maharashtra Value Added Tax Act, 2002 were tax free upto 31^st March 2007 and contra entries of these commodities were to  be taxable @ 4% from 1^st April 2007 under schedule ‘C’.  Similarly, some entries in schedule ‘C’ which were taxed @ 4% upto 31^st March 2007 were to be taxable @ 12.5% from 1^st April 2007.

2. By virtue of the amendment to the schedule by Government Notification referred to at Sr. No.(1) above, the benefit  of concessional   rate is extended as under :

1. following entries will be in A schedule and  thus, the commodities  will be tax free upto  30^th  September 2007:-

(i) Entry 9-A of schedule ‘A’	Paddy, rice, wheat and pulses in whole grain, split or broken form ; the flour of wheat and rice including atta, maida, rawa & suji, whether sold singly or in mixed form; the flour of pulses including besan when sold singly and not mixed with flour of other pulses or cereals.
(ii) Entry  51 of schedule ‘A’	Papad (except when served for       consumption) Gur Chillies, turmeric and tamarind whole, powdered or separated but excluding chilly seed and tamarind seed when sold in separated form; coriander seeds, fenugreek and Parsley (Suva), whole or powdered; coconut in shell and separated kernel of coconut, other than copra; solapuri chaddars; Towels; wet dates.

2. Commodities  covered by the following entries will be taxable @ 4%  w. e. f.      1^st October 2007:-

(i) Entry 20 of schedule ‘C’	i)   Paddy and rice, wheat and pulses in whole grain, split or broken form;
(ii) Entry  37 of schedule ‘C’	i)  The flour of wheat and  rice including atta, maida, rawa and suji, whether sold singly or in mixed form;
	ii) The flour of pulses including besan, whether sold singly or in mixed form.
(iii) Entry 40 of schedule ‘C’	Gur, jaggary and edible varieties of rub gur.
(iv)Entry 91 (b) of schedule ‘C’	Chillies, turmeric , tamarind, coriander seeds, fenugreek and parsley (suva), whether whole or powdered.
(v) Entry 106 (b) of schedule ‘C’	Coconut in shell and separated kernel of coconut (excluding Kopra).
(vi) Entry C-109 of Schedule ‘C’	Papad except when served for consumption.

3. The following commodities  will be taxable @ 12.5% w. e. f. 1^st October 2007:-

1. Wet dates;

2. Dry fruits including raisins and currants;

3. Tea in leaf or powder form including instant tea;

4. Solapuri chaddar and Towels  covered under notification No. VAT/1506/CR-130-A/Tax.-1 dt. 30^th September 2006, at serial No. 11 and 13 to the schedule were to be taxable  @ 4% under schedule  entry C-81 (b) w.e.f. 01/04/2007.
   
   By virtue  of amendment  to  the schedule by the notification  referred to at serial no. (2) above, effect of the 4% rate is extended.  These articles will be taxable @ 4% w.e.f. 01.10.2007.
    

5. Lac, shellac, and products thereof are covered under schedule Entry A-54 were tax-free up to 31^st March 2007 and were to be taxable @ 4% from 1^st April 2007.
   
   By virtue of amendment to the schedule by the notification referred to at serial no. (1) above, lac shellac and products thereof are fully exempted from tax without time limit.
    

6. Tobacco and tobacco products were covered under entry A-45 and were free of tax.  This entry is now amended by removing any reference to tobacco.
   
   A new entry namely entry 45A is introduced in schedule A.  This entry covers unmanufactured tobacco and bidis.  Unmanufactured tobacco will mean tobacco cleared under heading 2401 of the Central Excise Tariff.  Bidis covered by tariff items 2403 1031, 2403 1039, 2403 1090 will also be exempted from tax.  All other tobacco products covered by chapter 24 of the Central Excise Tariff (e.g. Cigarettes, cigar, cheroots, snuff, Jarda scented tobacco, gutkha, tobacco extracts and essences including quimaam) will be taxable @ 12.5%.

3. This circular cannot be made use of for legal interpretation of provisions of laws 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
    

4. You are requested to bring to the notice the contents of this circular to the members of your association.

Yours faithfully, 

(B.C. Khatua)
Commissioner of Sales Tax,
Maharashtra State, Mumbai