Govt proposes rebate on taxes paid on inputs

In a bid to provide relief on goods already with manufacturers or dealers, the Maharashtra budget has proposed permitting rebate of taxes paid on inputs.
The government has also announced a ‘Composition Scheme’ for retailers and restaurant owners. For goods in stock as on March 31, on which tax has been already paid, dealers can claim input tax rebate in six monthly instalments from July ‘03. Manufacturers can claim set-off of tax paid on purchase after they receive delivery of goods.
Mr Patil has proposed a new system for assessment of traders under VAT. “The VAT would place greater reliance on self-assessment by the dealer. The system of assessment will be replaced by a system of scrutiny of returns filed by the dealers and audit,� Mr Patil said.
However, in cases where the annual turnover exceeds Rs 40 lakh, the audit has to be done by chartered accountants. Though VAT would be applicable to all dealers, the state finance minister has proposed a Composition Scheme for certain categories of dealers including chemists, druggists, restaurants and contractors.
The scheme essentially covers “retailers at the last point of sale� to consumers. They will be charged a fixed amount of their turnover under the proposed scheme. All dealers who opt for the Composition Scheme will not be allowed to collect tax separately in their invoices and they will have to purchase all their inputs from local sources. “The details of the Composition Scheme will be independently notified,� Mr Patil said.