Maharashtra increases tax slabs to generate Rs 1,600 crore

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Drought surcharge will be imposed on including fuel, liquor, cigarettes and jewellery to raise Rs 1,600 crore for affected farmers in Maharashtra. The new taxes has come into effect from 30 September.

“The new system will be in place till February-end,” said Maharashtra finance minister Sudhir Mungantiwar. “We will rationalise it during the budget session and come up with a long-term policy on the Goods and Services Tax (GST).”

A surcharge of Rs 2 per litre would be levied on petrol and diesel in Mumbai. Due to the new tax, prices will rise by up to 50 paise. Sales tax on liquor, cigarettes and aerated soft drinks will be increased by 5%, and VAT on gold, diamonds and jewellery by 0.2%.

The state had scrapped lower body tax (LBT) for traders with less than Rs 50 crore turnover on  August 1, 2015. “We have decided to increase the sales tax on these items by 5%,” he added.

“When the petrol prices fell by Rs 2.11 following the crude crisis; people gained over Rs 1,000 crore due to this reduction. Now we are left with no option but to bring in a new tax with the budget being overburdened.”

Currently, rates of petrol and diesel at Navi Mumbai are Rs 67.61 per litre and Rs 52.58. So, if the LBT factor is removed, the rates will fall to Rs 65.24 per litre and Rs 50.73 per litre, respectively.

“Even after hiking petrol prices, tax in Maharashtra is lower than in Rajashan, Punjab, Andhra Pradesh, Madhya Pradesh, Karnataka and Kerala.”

At present, under the food security bill scheme, Maharashtra is bearing a burden of Rs 3,330 crore, including Rs 1,072 crore for loss of crop, Rs 690 crore for crop insurance, Rs 421 crore compensation to farmers hit by unseasonal rain among others in 14 drought-hit districts of Marathwada and Vidarbha.

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