The document summarizes key points from the Maharashtra State Budget for 2016-2017, including: 1) Amnesty schemes for profession tax and VAT aimed at reducing tax liabilities and penalties. 2) Reduction of VAT rates on various goods like LED tubes, barbed wire, and student supplies. 3) Increase of VAT rates on goods like coconut oil and terry towels. 4) New VAT exemptions for industries like textiles, renewable energy, and healthcare. 5) Changes to composition schemes to increase thresholds and exclude certain revenues.

1. Maharashtra State
Budget 2016 - 2017
[2016-17]
A N Bhutada & CO.
Chartered accountant
145 ASHOKA MALL , BUND GARDEN ROAD, PUNE – 411 001

2. Maharashtra State Budget 2016 - 2017
1 | P a g e
Index
1. High Lights of Budget 2016 - 17
2. Profession Tax
3. Reduction in VAT Rate
4. Increase in VAT Rate from 5 % to 5.50 %
5. Increase in VAT tax Rates
6. New Exemptions
7. Amnesty Scheme of VAT
8. Changes in Composition Scheme

3. Maharashtra State Budget 2016 - 2017
2 | P a g e
1. High Lights of Maharashtra State Budget 2016-2017
 Exemption from Levy of Sugarcane Purchase Tax for the year 2015-16 to the Sugar Factories which
export sugar as per Government policy.
 Amnesty scheme for Profession Tax enrollment holder. Tax liability and penalty will be restricted to
previous three years.
 Amnesty for tax administered by Sales Tax. For dues upto 31st
March, 2005 subject to full tax payment,
the interest and penalty shall be waived and for disputed dues from 1st
April, 2005 to 31st
March, 2012
subject to full tax payment, and 25% interest payment under VAT Act, balance dues will be waived.
 Exemption of VAT on Warping and Sizing of Yarn for promoting the Textile
 Turnover limit for composition to retailers under the MVAT Act increased from Rs.50 Lakh to Rs. 1 Crore.
 VAT on the Mammography machines used for detection of breast cancers
 VAT on sterile water for injections reduced from 12.5% to 5.5%.
 Bakery Industry, the turnover of tax free goods is excluded for computing the turnover for composition.
 VAT on Retrofit kit fitted to vehicles for physically handicapped exempted.
 VAT on LED Tubes reduced from 12.5% to 5.5%.
 VAT on Pyrolysis Oil reduced from 12.5% to 5.5%.
 Profession Tax exemption to the armed personnel of CRPF and BSF.
 Exemption from late fee to the Government aided educational institution for e-filing of Professional Tax
returns.
 VAT on Steel Wire Mesh, Barbed Wire and Chain links reduced from 5% to 5.5%.
 VAT on Pencil Box, Stapler pins, Dusters, Gum and Gum-sticks used by student reduced from 12.5% to
5.5%.
 VAT exempted on the Bamboo Products excluding Bamboo furniture.

4. Maharashtra State Budget 2016 - 2017
3 | P a g e
 Amnesty scheme under Industrial Policy 2013 for closed and un-revivable units to be implemented
afresh.
 Logistic Hubs will be established to promote the Logistic Industry and Levy of CST will be exempted on
the interstate sales effected from the Logistic Hubs.
 VAT rate increased from 5% to 5.5%, excluding declared goods.
 Motor Vehicle Tax enhanced on two wheelers and three wheelers owned by individual. Tax to be based
on engine capacity – upto 99cc – 8%, 100cc to 299cc – 9%, 300cc and above – 10%. Institutional and
Imported Vehicles to be subjected to double the rate of tax.
 The VAT composition tax rate 8% to hotels and restaurants having turnover of sales Rs. 3 Crore and
more.
 Levy of Entry Tax on Marble and Granite slabs.
 Increase in Lottery Tax on the draws of Lotteries.
 VAT tax on Coconut hair oil sold in pack upto 500 ml enhanced to 12.5%.
 Establishment of Advance Ruling Authority for speedy disposal of disputed questions under Sales Tax
Laws.
 Implementations of SAP based Computer system in Sales Tax Department. Input Tax Ledger to be made
available to the tax payer.
 Pilot Project will be started by Sales Tax Department for implementation of Digital Billing system.

5. Maharashtra State Budget 2016 - 2017
4 | P a g e
2. Profession Tax
Late registration for Profession Tax penalty will be restricted to 3 years instead of earlier 8 years.
Exemption to armed personnel of CRPF & BSF.
No late filing fee for Government aided educational institutions.
3. Reduction in VAT Rate
Tax rate is proposed to be reduced from 12.50% to 5.50% on following products:
i. Barbed wire, wire mesh and chain links
ii. Pyrolysis Oil produced by processing plastic waste and other organic waste
iii. LED tubes
iv. Pencil Box, all types of gum, glues and sticks, stapler pin, tape dispenser, duster and all types of
files.
v. Sale of used vehicles by banks and financial institutions for only such vehicles on which sales tax
or entry tax has been paid at the earlier stage
vi. Sterile water for injection
4. Increase in VAT Rate from 5 % to 5.50 %
General rate of tax on goods, except declared goods, is proposed to be enhanced from 5% to 5.50%.
5. Increase in VAT tax Rates.
Rate of tax is increased on following products:
i. Coconut oil sold in packaging upto 500 ml is proposed to increase from 5% to 12.50%
ii. Tax of 5.50% is proposed on terry towels mainly used in hotels.

6. Maharashtra State Budget 2016 - 2017
5 | P a g e
iii. Tax rate on tea shall be 5.50% upto 31.03.2017
iv. Tax @ 2% on cotton seed is proposed
6. New Exemptions
Following goods are proposed to be exempt from tax:
i. Activity of Warping and sizing on yarn
ii. Buses operated on battery or hybrid fuel used for public transport and which are proposed by
public transport undertakings
iii. Retrofit kit for vehicles of differently abled persons
iv. Medicines and instruments for dialysis
v. Mammography machines used for detection of breast cancer
vi. Bamboo handicraft products, except, bamboo furniture
vii. Exemption from CST is proposed on the resale of goods brought from outside the state and
packed or repacked inside the logistics hub.
7. Amnesty Scheme of VAT
Amnesty for tax administered by Sales Tax. For dues upto 31st March, 2005 subject to full tax payment,
the interest and penalty shall be waived and for disputed dues from 1st April, 2005 to 31st March, 2012
subject to full tax payment, and 25% interest payment under VAT Act, balance dues will be waived.
Applicable to
i. Dealer who has filed an appeal and the recovery of disputed dues is stayed by the appellate
authority
ii. Dealer withdraws the appeal

7. Maharashtra State Budget 2016 - 2017
6 | P a g e
Conditions:
i. For the periods before 01.04.2005 –
Dealer pays the disputed tax in full, then the corresponding interest and penalty shall be waived
ii. For the periods from 01.04.2005 to 31.03.2012 –
Dealer pays the disputed tax amount and 25% of disputed interest, then the corresponding
balance interest and penalty shall be waived.
iii. Amnesty can be availed even for the some of the issues pending in appeal
iv. Amnesty scheme shall be available from 01.04.2016 to 30.09.2016
8. Changes in Composition Scheme
Small entrepreneurs are an important component of Indian economy. It is necessary to encourage
these entrepreneurs as they provide numerous employment opportunities. Sales tax provides various
composition schemes to such small entrepreneurs computation of tax liability and reduced compliance
cost.
i. Yearly turnover limit for retailers is enhanced from Rs 50 Lacs to 1 crore
ii. Under composition scheme for bakeries it is proposed to exclude turnover of tax free
goods
iii. Rate of composition for hotels, restaurants, etc is proposed to be increased to 8% if the
turnover of food and non-alcoholic drinks in previous year has exceeded Rs. 3 crores