Surchargeon vat
This query is : Resolved
15 March 2015
DEAR SIR / MADAM,
I WANT TO KNOW IF THERE IS ANY CHANGE IN VAT (MAHARASHTRA STATE) W.E.F. 01.04.2015? ONE OF OUR PUNE CLIENT TOLD THAT GOVT. IS TO ABOLISH LBT FROM 01.04.2015 & THERE WILL BE SURCHARGE ON VAT INSTEED?
PLEASE SHARE INFORMATION YOU HAVE ON THIS.
RACHANA
I WANT TO KNOW IF THERE IS ANY CHANGE IN VAT (MAHARASHTRA STATE) W.E.F. 01.04.2015? ONE OF OUR PUNE CLIENT TOLD THAT GOVT. IS TO ABOLISH LBT FROM 01.04.2015 & THERE WILL BE SURCHARGE ON VAT INSTEED?
PLEASE SHARE INFORMATION YOU HAVE ON THIS.
RACHANA
16 March 2015
No. LBT has not been abolished. Industry has been proposing to abolish LBT. Announcement shall be made during Maharashtra Budget presentation on 18 March. Refer the below link for more details.
http://timesofindia.indiatimes.com/city/nashik/Industrial-bodies-want-state-to-abolish-local-taxes/articleshow/46513672.cms
http://timesofindia.indiatimes.com/city/nashik/Industrial-bodies-want-state-to-abolish-local-taxes/articleshow/46513672.cms
18 March 2015
Extract of Maharashtra Budget speech. The budget was presented today.
16. Speaker Sir, the Government is committed to abolition of Local Body Tax. Due to abolition of Local Body Tax, compensation of rupees six thousand eight hundred seventy five crore will be required to be given to the Municipal Corporations excluding Mumbai. This loss of revenue will be compensated by enhancing rate of tax under Value Added Tax Act. The enhanced rate of tax will be applicable to the whole State. A Revenue
Neutral Rate has been recommended considering the share of increased tax collection to be given to the areas where Local Body Tax is not levied.
Mumbai Municipal Corporation gets substantial revenue, by levying Octroi on Crude Oil. This Octroi amount is collected by Oil Companies as part of State Specific Duty from all consumers in the State. This aspect is also required to be taken into account.
Extensive deliberations are required on the enhancement in tax rates under Value Added Tax. The Local Body Tax will be abolished from 1st August, 2015.
The revenue received on account of increase in tax rates under MVAT Act will be assigned to the Municipal Corporations and demand will be tabled on account of grants to be given to other areas, as per requirement.
16. Speaker Sir, the Government is committed to abolition of Local Body Tax. Due to abolition of Local Body Tax, compensation of rupees six thousand eight hundred seventy five crore will be required to be given to the Municipal Corporations excluding Mumbai. This loss of revenue will be compensated by enhancing rate of tax under Value Added Tax Act. The enhanced rate of tax will be applicable to the whole State. A Revenue
Neutral Rate has been recommended considering the share of increased tax collection to be given to the areas where Local Body Tax is not levied.
Mumbai Municipal Corporation gets substantial revenue, by levying Octroi on Crude Oil. This Octroi amount is collected by Oil Companies as part of State Specific Duty from all consumers in the State. This aspect is also required to be taken into account.
Extensive deliberations are required on the enhancement in tax rates under Value Added Tax. The Local Body Tax will be abolished from 1st August, 2015.
The revenue received on account of increase in tax rates under MVAT Act will be assigned to the Municipal Corporations and demand will be tabled on account of grants to be given to other areas, as per requirement.
24 March 2015
DEAR SIR / MADAM,
IS THERE ANY CHANGE VAT RATE IN MAHARASHTRA BUDGET 2015?
- RACHANA
IS THERE ANY CHANGE VAT RATE IN MAHARASHTRA BUDGET 2015?
- RACHANA
25 March 2015
Yes. Vat rates have been increased to compensate for removal of LBT
26 March 2015
DEAR SIR / MADAM,
WE ARE IN TO TRADING OF RUBBER & RUBBER CHEMICALS WHICH AS OF NOW ARE CHARGEABLE @ VAT 5% OR 12.5 % (MAHARASHTRA STATE).
WHAT ARE RATES NOW AFTER MAHARASHTRA BUDGET 2015 ?
- RACHANA
WE ARE IN TO TRADING OF RUBBER & RUBBER CHEMICALS WHICH AS OF NOW ARE CHARGEABLE @ VAT 5% OR 12.5 % (MAHARASHTRA STATE).
WHAT ARE RATES NOW AFTER MAHARASHTRA BUDGET 2015 ?
- RACHANA
26 July 2025
Here’s a summary of the situation regarding **Surcharge on VAT and LBT abolition in Maharashtra (as of FY 2015-16):**
---
### 1. **Local Body Tax (LBT) Status:**
* As per Maharashtra Budget 2015 (presented on 18 March 2015), the government **planned to abolish LBT** but not effective from 1st April 2015.
* LBT abolition was proposed to be implemented **from 1st August 2015**.
* Until then, LBT was still applicable.
### 2. **Compensation for LBT Abolition:**
* To compensate for revenue loss to municipal corporations due to abolition of LBT, the **VAT rates were increased**.
* The increase is **statewide** and intended to be revenue neutral (i.e., VAT collections should compensate for LBT loss).
* The enhanced VAT rate revenue will be shared with municipal corporations and other local bodies accordingly.
### 3. **VAT Rate Changes:**
* VAT rates were revised upward from the rates applicable before the budget.
* Rubber and rubber chemicals, earlier charged at 5% or 12.5%, have been subject to revised VAT rates.
* The exact new rates depend on the product classification under Maharashtra VAT schedules.
### 4. **Surcharge on VAT:**
* There was no separate *surcharge* on VAT as such; rather, the **VAT rates themselves were increased**.
* No additional surcharge beyond VAT was introduced as a replacement for LBT.
---
### What to do now?
* Check the latest Maharashtra VAT notifications or circulars post-budget for exact new VAT rates applicable to your products (like rubber and rubber chemicals).
* Continue complying with LBT till 31 July 2015, then from 1 August 2015, LBT is abolished and VAT rates will apply.
---
### Useful link from your query:
* [Industrial bodies want state to abolish local taxes - Times of India](http://timesofindia.indiatimes.com/city/nashik/Industrial-bodies-want-state-to-abolish-local-taxes/articleshow/46513672.cms)
---
If you want, I can help you get the exact VAT rates for rubber and rubber chemicals post-2015 Maharashtra Budget. Would you like me to?
---
### 1. **Local Body Tax (LBT) Status:**
* As per Maharashtra Budget 2015 (presented on 18 March 2015), the government **planned to abolish LBT** but not effective from 1st April 2015.
* LBT abolition was proposed to be implemented **from 1st August 2015**.
* Until then, LBT was still applicable.
### 2. **Compensation for LBT Abolition:**
* To compensate for revenue loss to municipal corporations due to abolition of LBT, the **VAT rates were increased**.
* The increase is **statewide** and intended to be revenue neutral (i.e., VAT collections should compensate for LBT loss).
* The enhanced VAT rate revenue will be shared with municipal corporations and other local bodies accordingly.
### 3. **VAT Rate Changes:**
* VAT rates were revised upward from the rates applicable before the budget.
* Rubber and rubber chemicals, earlier charged at 5% or 12.5%, have been subject to revised VAT rates.
* The exact new rates depend on the product classification under Maharashtra VAT schedules.
### 4. **Surcharge on VAT:**
* There was no separate *surcharge* on VAT as such; rather, the **VAT rates themselves were increased**.
* No additional surcharge beyond VAT was introduced as a replacement for LBT.
---
### What to do now?
* Check the latest Maharashtra VAT notifications or circulars post-budget for exact new VAT rates applicable to your products (like rubber and rubber chemicals).
* Continue complying with LBT till 31 July 2015, then from 1 August 2015, LBT is abolished and VAT rates will apply.
---
### Useful link from your query:
* [Industrial bodies want state to abolish local taxes - Times of India](http://timesofindia.indiatimes.com/city/nashik/Industrial-bodies-want-state-to-abolish-local-taxes/articleshow/46513672.cms)
---
If you want, I can help you get the exact VAT rates for rubber and rubber chemicals post-2015 Maharashtra Budget. Would you like me to?
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