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News Indirect Tax-Value Added Tax

  • Mar 15, 2023
  • Invoices, cheque payment not sufficient to claim ITC under VAT: SC

    The Supreme Court (SC) has set aside a Karnataka High Court order that allowed dealers to claim input tax credit (ITC) under the VAT regime by producing invoices and cheque payments.

    The SC allowed tax authorities' appeal against the High Court judgment. It said a dealer claiming ITC has to prove beyond doubt the occurrence of the actual transaction” and the “actual physical movement of the goods".

    It pronounced the order HC as “erroneous” and said that, “for claiming ITC, genuineness of the transaction and actual physical movement of the goods are the sine qua non and the aforesaid can be proved only by furnishing the name and address of the selling dealer, details of the vehicle which has delivered the goods, payment of freight charges, acknowledgement of taking delivery of goods, tax invoices and payment particulars etc.”

  • Sep 10, 2018
  • Rajasthan cuts VAT on petrol by 4 percentage pts, price to fall by Rs 2.5

    Rajasthan Chief Minister Vasundhara Raje announced a four-per cent reduction in value-added tax (VAT) on petrol and diesel on Sunday, which will reduce their prices by Rs 2.5 per litre in the state. VAT on petrol will be reduced from 30 to 26 per cent and on diesel from 22 to 18 per cent, Raje announced at a public meeting organised in Rawatsar in Hanumangarh district as part of her 'Rajasthan Gaurav Yatra'. The decision will cost the exchequer Rs 20 billion and will provide the people with a relief of Rs 2.5 per litre on petrol and diesel.

  • Mar 24, 2018
  • VAT cut on ATF to boost aviation

    Telangana Industry and IT Minister KT Rama Rao on Friday announced the reduction in value-added tax (VAT) on aviation turbine fuel (ATF) from 16 per cent to one per cent. Recalling what Telangana government promised during Wings India-2018 recently, KTR said the cut in VAT will come into force immediately and this will further boost aviation industry growth, while adding that the Airport Express Connectivity project, with an investment of Rs 4,650 crore, connecting the airport will be completed in two years.

  • Feb 06, 2018
  • Just 4 states cut VAT on petrol, diesel: Dharmendra Pradhan

    Just 4 states and one union territory have cut local sales tax or VAT on petrol and diesel since the October 2017 decision of the Centre to reduce excise duty on the two fuels, Oil Minister Dharmendra Pradhan said today. As petrol and diesel prices soared to a three-year high, the Centre on October 3, 2017 reduced excise duty on petrol and diesel by Rs 2 per litre each and asked states governments to match it with a cut in VAT. In a written reply to a question in the Lok Sabha, Pradhan said: "Four state governments and one Union territory have reduced the VAT on petrol and diesel."

  • Dec 21, 2017
  • Excise, VAT may co-exist with GST on fuel

    The goods and services tax (GST) Council is trying to build consensus among states over imposing the GST on petroleum products by allowing the Centre and states to levy existing taxes over a 28 per cent GST rate.States have been averse to including fuel in the GST because levies on it account for 40 per cent of their revenue. They could change their mind if allowed to continue with value-added tax (VAT) and other imposts on fuel above the GST rate. The Centre, which is willing to impose the GST on fuel, may also be permitted to charge excise duty above the GST rate.
    “Petroleum products account for 40 per cent of states’ revenues.

  • Oct 14, 2017
  • Madhya Pradesh government cuts VAT on petrol, diesel

    The Madhya Pradesh government on Friday reduced value-added tax (VAT) on petrol and diesel by 3% and 5%, respectively. The state government also withdrew the additional cess of Rs1.50 per litre on diesel.Notably, the Bharatiya Janata Party (BJP)-ruled Gujarat and Maharashtra states had reduced VAT on these fuels earlier this week.“The Madhya Pradesh government has decided to reduce VAT on petrol by 3%. The VAT on diesel is reduced by 5%. Moreover, the additional cess of Rs1.50 per litre has also been withdrawn,” state finance minister Jayant Malaiya announced after a meeting with chief minister Shivraj Singh Chouhan.

  • Oct 11, 2017
  • VAT cut on petrol by states raises hope of inclusion of fuel under GST

    A bipartisan consensus emerged on Tuesday after Gujarat, Maharashtra and Himachal Pradesh cut value added tax (VAT) on petrol and diesel in tandem with the central government’s decision last week to reduce excise duty, stoking expectations that the inclusion of petroleum products in the goods and service tax (GST) may happen sooner.
    The actions of the three state governments will put pressure on other states to cut VAT on petrol and diesel; it also signalled the possibility of coordinated responses even on products outside GST—in this case it could have a salutary effect on retail inflation.
    Bharatiya Janata Party (BJP)-ruled Gujarat reduced VAT on petrol and diesel by 4%, becoming the first state to give relief to consumers from a recent surge in oil prices.

  • Oct 10, 2017
  • Gujarat slashes VAT on fuel prices by 4%

    The Bharatiya Janata Party (BJP)-ruled Gujarat has decided to slash the Value-Added Tax (VAT) on fuel prices in the state.Chief Minister Vijay Rupani, while addressing the media, said, "We are cutting down the VAT on fuel by 4 per cent. Hence, the price of petrol will come down by Rs. 2.93, and that of diesel by Rs, 2.72."Earlier also, Rupani, expressing compliance with the Centre's directive to slash the VAT on fuel in the states, had said that the state government would reduce taxes on petrol and diesel in the coming two or three days.

  • Sep 29, 2017
  • Kerala gives UDAN flights a boost, cuts VAT on jet fuel by 5 pct

    Running the extra mile for the Centre’s regional connectivity scheme, UDAN, the Kerala government has trimmed its VAT rate on aviation turbine fuel (ATF) by 5% from the existing 28.75%. This would be valid for a period of five years. The Centre had requested states to reduce VAT on ATF by 1%, to encourage flight services connecting important cities in the country. However, to add to the incentivisation in good measure, Kerala decided to reduce VAT by 5%, an official release said. A cabinet meeting chaired by CM Pinarayi Vijayan took the decision.

  • Sep 15, 2017
  • Uniform Petro Tax may Not Remain a Pipe Dream

    States have agreed to cap value-added tax (VAT) on natural gas at 5% and lower it on other petroleum products such as petrol and diesel used by the manufacturing sector as an input. That could mark a significant breakthrough toward uniform nationwide prices of petroleum goods. The Goods and Services Tax (GST) Council will take up the scheme once it is formulated by the states.“The council will take a final call on the proposal,“ a senior government official told ET. “There have been discussions between the Centre and states at the officials' level.“

  • Jun 01, 2017
  • Maharashtra government offers VAT benefit to realty buyers

    In a move that would impact all real estate transactions across the state, the Maharashtra government has issued a notification to levy Value Added Tax (VAT) based on staggered payments received from homebuyers. With this, buyers making payments before June end for their under-construction properties will be charged 1% VAT, while payments after that will attract 6% State GST as part of GST regime.Currently, property transactions attract VAT at 1% of the transaction value payable at the time of registration of the agreement. However, with the amendment in the Maharashtra VAT Act, the buyer will have to pay the tax at the time of making staggered payments to the developer.

  • Mar 25, 2017
  • Petrol set to cost more in Goa as Budget hikes VAT by 15%

    Petrol prices in Goa are set to soar as Chief Minister Manohar Parrikar today announced a 15 per cent hike in value-added tax (VAT) on the fuel.The Goa government had kept petrol prices below Rs.60 per litre during the last five years by reducing the VAT on it.“My government, since the last five years, has been able to maintain the promise given to the people of the state in 2012, and has ensured that the prices of Motor Spirit (petrol) did not cross the threshold level of Rs.60 per litre,” Parrikar said presenting the State Budget today.“The prices of petrol in Goa are significantly lower compared to the neighbouring states of Karnataka and Maharashtra, where this fuel is sold at Rs.72 and Rs.76 respectively,” he said.Entry tax abolition “It is time to review this measure, in view of the enhanced spending and provisions made for various existing and new initiatives in the Budget.

  • Mar 08, 2017
  • Delhi cuts VAT on ATF to 1% for regional flights; other states to announce the same soon

    The Delhi government today announced reduction in Value Added Tax (VAT) on jet fuel for regional flights flying out of Delhi airport. Delhi's deputy chief minister and finance minister Manish Sisodia announced that VAT on ATF for regional flights will now be charged at the rate of 1 per cent from earlier 25 per cent in Delhi.The request for reduction was made by the aviation ministry in February this year. According to Centre's directive under regional connectivity scheme, other state governments will also have to reduce the VAT to 1 per cent on jet fuel.

  • Jan 09, 2017
  • States record jump in VAT collections after note ban

    Demonetisation seems to have led to a windfall for states thanks to a spurt in value added tax (VAT) collections since Prime Minister Narendra Modi’s November 8 announcement, according to the latest data. This appears to undermine the contention that the cash crunch punctured demand after the government invalidated Rs 500 and Rs 1,000 currency notes.

  • Dec 29, 2016
  • Cut in VAT makes cell phones cheaper in Telangana

    Good news for phone users. The prices of cell phones are set to come down in Telangana, as the VAT on them has been reduced from 14.5 per cent to 5 per cent.
    The State Legislative Assembly on Wednesday adopted the Value Added Tax (VAT) Amendment Bill, seeking to reduce VAT on cell phones. The bill was introduced by Minister T Srinivas Yadav. Congress, Bharatiya Janata Party and Telugu Desam Party members welcomed the Bill.

  • Sep 17, 2016
  • Maharashtra government hikes VAT on petrol by Rs 1.50 per litre

    Maharashtra government today hiked the value added tax (VAT) levied on petrol by Rs 1.50 per litre. The measure is expected to generate additional revenue of Rs 600 crore, a senior official said. The state has not touched diesel prices, fearing losing revenue to neighbouring states, he added.

  • May 18, 2016
  • Goa government reduces VAT on petrol to keep prices under Rs 60 per litre

    Keeping its promise to not allow petrol prices exceed Rs 60 per litre, the Goa government today reduced the value added tax (VAT) levied on the fuel by two per cent after the hike announced last night."The Goa government has reduced the VAT on petrol by 2 per cent brining it to 20 per cent from 22 per cent," a senior officer from state commercial tax department said.

  • May 12, 2016
  • Amazon, traders face probe over false Cenvat credit claims

    E-commerce giant Amazon and 50 of its sellers are facing investigations for allegedly falsely claiming Central Value Added Tax (Cenvat) credit and evading tax of about Rs 118 crore. Officers of the Directorate General of Central Excise Intelligence (DGCEI) have conducted search operations at Amazon's business premises across the country and at its headquarters in Bengaluru, in January. "So far, the total tax evasion we have been able to establish is to the tune of Rs 118 crore, which could increase. We will soon issue show cause notices to respective sellers," a senior officer told the Business Standard. "We have recorded the statement of Amazon executives and are assessing the details provided by them," he added.

  • Mar 19, 2016
  • Maharashtra hikes general VAT rate marginally

    The Maharashtra government has marginally increased the general VAT rate from 5 to 5.5 per cent in the State budget. The increase is in anticipation of revenues losses when Goods and Services Tax (GST) gets implemented.
    Finance Minister Sudhir Mungantiwar said in his budget speech that there is a likelihood of the State suffering revenue loss from the implementation of Goods and Services Tax and said that the compensation from the Centre will depend on the revenue collection of States in the years prior to implementation of GST. While this makes goods and services in the State dearer by 0.5 per cent, there are other product-specific changes in the tax structure.

  • Mar 17, 2016
  • Goa budget raises VAT on petrol to 22%

    Commuters and tourists in Goa will have to shell out extra money as the State budget on Wednesday proposed an increase of 7 per cent in value added tax (VAT) on motor spirit.Chief Minister Laxmikant Parsekar, who holds finance portfolio, justified the hike in his budget speech, saying that as crude oil prices had decreased in the international market, the government wanted to increase VAT on motor spirit from 15 to 22 per cent.When the BJP government came to power in March 2012, the then Chief Minister Manohar Parrikar, as promised in the party election manifesto, had abolished VAT on petrol which had resulted in decrease in petrol price by Rs. 11, making cheapest in the country.