A Rs 184-crore revenue surplus budget for Maharashtra, which is suffering from an acute drought this year, was presented to the Assembly by State Finance Minister Ajit Pawar.
The revenue receipts for the fiscal are expected at Rs 1,55,986 crore and expenditure is estimated at Rs 1,55,802 crore. According to the advance estimates, gross state domestic product is expected to increase to 7.1 per cent for 2012-13.
In order to augment tax revenues, Pawar has decided to increase value added tax (VAT) on gold, silver, diamond, precious metals and jewellery from 1 to 1.10 per cent. The VAT on equipment and tools for the jewellery trade has also been increased from 1 per cent to 5 per cent.
To ensure that stamp duty is paid by banks and financial institutions on mortgage deeds, Pawar has decided to amend the Bombay Stamp Act, which will make these entities liable to pay the duty.
In a bid to further shore up revenues, the VAT on powders, cubes and tablets, which are used for making non-alcoholic beverages (fruit juices), has been increased from 5 per cent to 12.5 per cent. Textiles, which are used in the industrial sector, will now attract 5 per cent VAT.
However, keeping an eye on the Lok Sabha elections a year away, Pawar has decided to maintain tax exemptions till March 31, 2014 on essential commodities such as rice, wheat, pulses, chillies, Sholapuri chadars, towels and dates. The concessional rate on tea will also continue, he said.
Exemptions have also been granted on Braille watches and vehicles for differently-abled persons. The budget has also reduced the rate of tax of heart implants from 12.5 per cent to 5 per cent. Similarly, earth excavators of a certain make, will now have lower duty of 5 per cent. Moreover, if a leasing company buys passengers cars and leases them out, they can claim a set-off on the purchase of the vehicles.
To simplify the process of record keeping for sale on wine, Pawar has decided to introduce VAT at the winery itself, so that retailers can avoid the cumbersome process of record keeping at the shop level. The decision will not impact the retail price of wine, but will ensure better recovery of taxes.