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Maharashtra offers tax sops to industry

LiveMint logoLiveMint 05-06-2014 Makarand Gadgil

Mumbai: With an eye on assembly elections scheduled for later this year, Maharashtra’s deputy chief minister and finance minister Ajit Pawar has offered tax sops worth over `900 crore to industry and other interest groups as part of the budget for 2014-15 presented in the state assembly on Thursday.

Assembly elections in the state are scheduled for October-November.

As part of the proposals, the Maharashtra government has proposed to increase the tax slab for professional tax from `5,000 per month to `7,500 per month. The move is expected to exempt nearly 8,00,000 workers from paying professional tax.

The state government has also decided to waive off sugarcane purchase tax for the previous fiscal year, a decision that could benefit nearly two million sugarcane growing farmers in Maharashtra.

As part of concessions given to industry, the sale or leasing of copyrights of films exhibited from 1 April 2005 onwards, will be exempt from value-added tax (VAT). Earlier this exemption was given only for films exhibited after 1 April 2011.

Purchase of aircraft spare parts will also no longer attract VAT, a move that may help attract the aircraft maintenance industry to the state.

“The budget is fiscally highly irresponsible, since government knows that, it is not going to come back to power, it is leaving behind financial mess for the next government,” said Devendra Fadanvis, president of te Bharatiya Janata Party’s (BJP) state unit.

“It seems, government has not yet recovered from the setback it received in Lok Sabha elections, it has just performed the ritual of presenting the budget, there is nothing imaginative on policy front,” said Girish Kuber, editor of Marathi daily Loksatta, adding that key issues such as the local body tax and toll tax remained unaddressed in the budget.

Local body tax (LBT) replaced Octroi starting April 2013 in various municipal corporations of the state except, Mumbai. However traders have been opposed to the implementation of LBT, as they claim it has added bureacracy and led to harrasement from municipal officials.

The state has also seen agitation against toll taxes, with parties like the Maharashtra Navnirman Sena opposing the state’s toll tax policy and alleging that projects were awarded in a non transparent manner.

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