VAT threshold now raised to Rs 10 lakh

Reiterating its commitment to introduce value-added tax from April 1, the Maharashtra government, while presenting the state budget for ''03-04 today, raised the threshold limit from Rs 1 lakh to Rs 10 lakh, in an effort to make life easier for small businessmen.
Traders with an annual turnover below Rs 10 lakh will be outside the purview of VAT and will not be required to register.
At present dealers, including importers of goods from outside Maharashtra, are required to register if their annual turnover exceeds Rs 1 lakh. For other businessmen, the limit is Rs 2.5 lakh.
However, with a view to provide relief to small businessmen with low turnover and to keep them out of the purview of VAT, the finance minister Jayant Patil proposed to raise the limit to Rs 10 lakh. But for importers the limit will continue to be Rs 1 lakh and registration certificates of traders having turnover below the limit would be cancelled, the budget proposes.
The budget announced that all unlisted commodities, i.e. which are not included in any schedule of the Maharashtra Value Added Tax Bill, will be taxed at the standard rate of 12.5%, considerably lower than the present rate of 15.3%, Mr Patil said.
Various concessions presently available under the Bombay Sales Tax Act will be withdrawn once the VAT system becomes operational, the finance minister said. However, units set up in the special economic zones, 100% export-oriented units and other exporting units under the Central scheme will continue to enjoy ongoing concessions, Mr Patil clarified.
The finance minister announced that various Acts such as Bombay Sales Tax Act, The Works Contract Act, the Lease Act and Motor Spirits Tax Act will be replaced by the Maharashtra Value Added Tax Act from April 1, ''03.
According to the finance minister while the state initially expected to lose a revenue of Rs 2,000 crore due to the lower VAT tax rate, it will finally gain since the new regime will bring new tax payers into the net.
"The government machinery is all set for the change," Mr Patil later said.