21 June 2019
Amendments to VAT law proposed in the Maharashtra budget

The Finance Budget of Maharashtra has been announced for the financial year 2019-2020. We have captured the major amendments proposed to be introduced with regard to Maharashtra VAT and Profession tax laws.
Maharashtra Settlement of Arrears of Tax, Interest, Penalty or Late Fee Ordinance, 2019
  • The first phase of the settlement scheme has been extended till 31 July 2019 and the second phase till 31 August 2019.
  • The arrears as per statutory orders passed and returns or the revised returns filed on or before 16 August 2019 shall also be eligible for settlement scheme.
  • To arrive at the amount eligible for settlement, steps to be followed are as under:
- First - The amount paid till 31 March 2019 shall be reduced from the total tax  outstanding
- Second - The ratio, as provided in the Ordinance, shall be applied to the balance  amount to determine the undisputed tax and disputed tax that is eligible for settlement.
  • Now, instead of treating tax, interest, and late fee as undisputed, only the tax will be treated as undisputed. This amendment will enable a large number of taxpayers to avail the benefits of the Settlement Scheme.
  • The existing provision of the Ordinance provides that the applicant, on payment of the requisite amount, is entitled to the waiver of the balance amount of arrears in respect of disputed tax, interest, penalty, and late fee. It is clarified that if the amount paid is less than requisite, such amount will first be adjusted against the undisputed tax in full and then the remaining amount, if any, will be adjusted proportionately towards the disputed tax, interest, penalty, or late fee.
  • Only the tax amount recommended by the auditor in Form-704 and accepted by the dealer is proposed to be considered as undisputed. This will give relief in respect of interest and late fee.
  • The applicant, who has taken the benefit of the ordinance for payment of arrears of Entry tax, cannot claim set-off of such Entry tax paid under the Maharashtra Value Added Tax Rules, 2005.
  • The amendments shall be effective retrospectively from 1 April 2019.
Profession Tax Act
  • All professionals, holding an enrollment certificate, are liable to pay profession tax every year in advance up to 30 June of such year. Now, in accordance with the “Ease of Doing Business” policy, this due date is being extended to the end of the respective year. This amendment will be made applicable to 2019-20.
  • Provision for a penalty in respect of delay in obtaining an enrollment certificate has been done away with. Instead, a levy of fixed interest at the rate of 1.25% per month has been proposed.​
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