Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: ACCOUNTING STANDARD :: articles on VAT and GST in India :: form 3cd :: list of goods taxed at 4% :: VAT Audit :: TAX RATES - GOODS TAXABLE @ 4% :: TDS :: VAT RATES :: cpt :: Central Excise rule to resale the machines to a new company :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ACCOUNTING STANDARDS :: due date for vat payment :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: empanelment
 
 
VAT (Value Added Tax) »
 15% rise in collectionof VAT for Oct-Nov
 China to simplify tax scheme after switch to VAT
 Cabinet clears key proposals on VAT, regularisation of jobs
 Cases of VAT overcharging flood consumer forum
 State seeks relief from Centre
 Flat rate VAT changes for small businesses explained
 Cenvat Credit Of Additional Duties Of Customs [Cvd] On Imported Coal
 Excise Dept puts VAT refund on fast track
 Consumer fora receive 18 VAT plaints
 Appointment of Assistant VATO - F.3(14)/Fin(Rev-I)2012-13/DSVI/334
 Bio-diesel body seeks VAT relaxation

Maharashtra government divided over VAT set-off decision
June, 14th 2012

The Congress-led government in Maharashtra appears divided over reversing its decision to amend the value-added tax (VAT) set off scheme applied to the automobile industry, despite pressure from the industry and political leaders to do so.

The state finance department has taken an aggressive stand, saying the government should not succumb to auto companies, while other departments say the issue needs to be revisited to arrest the fall of investment to the state.

Instead of a VAT set-off claimed on a gross sales basis, auto companies were asked to claim in on a net sales basis from April 1, 2011, a move which has been objected to by the automobile industry.
 
According to critics of the governments move, the amendment is a blow to the auto makers, which are now preferring other states over Maharashtra for new projects.

Mahindra and Mahindra has recently announced its decision to invest in Tamil Nadu, while Maruti Suzuki India, Ford India and Volkswagen have chosen Gujarat, not Maharashtra.

INVESTMENT HURDLE

State is rapidly losing investment in auto sector to other states due to VAT Act amendment

Finance department defends decision, saying reversal may put additional burden of Rs 7,000 crore annually

Sharad Pawar raps state government for lack of continuity in its decisions

Government and auto industry continue to differ

Incidentally, Union Agriculture Minister and Nationalist Congress Party chief Sharad Pawar criticised the state government for losing investments to other states and not keeping continuity in the decisions taken in the past on incentives.

A senior government official, who did not want to be identified, told Business Standard: If the government retracts, it will have to bear the burden of at least Rs 7,000 crore annually, which is not possible during the present economic slowdown.

The 52 (A) amendment to the Maharashtra VAT Act has prevented companies from claiming higher input tax credit (ITC). Earlier, the companies would formally sell their entire production from the manufacturing arm to the marketing and sales arm, to claim VAT set-off for sales within Maharashtra. The marketing arm would then, in effect, bill this to other states across the country. However, under a revised rule, the companies would not be able to claim the VAT set-off on products sold outside the state, the official said.

The finance department has prepared a note, strongly opposing reversing the amendment to the VAT Act. The note would be forward to the state Cabinet for its consideration.

Chief Minister Prithviraj Chavan admitted the government and the industry were unable to arrive at a consensus in this regard. He said the industry department, as well as Ernst and Young, looked into the issue but were unable to come out with a solution agreeable to the auto industry. The issue still remains unresolved as the auto industry stuck to its stand. Chavan indicated the Cabinet would discuss the issue again.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Publishing Management System PMS News Management System Publishing Management System Development Online News Management System for media company custom Publishing management system development Survey management system Market Res

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions