MAVAT RATE OF IRON & STEEL

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Querist : Anonymous (Querist)

02 May 2011 W.E.F.01/05/2011 MVAT RATE INCREASED 4% TO 5% ON IRON & STEEL. I WANT NOTIFICATION COPY.

Ram Avtar Singh

Ram Avtar Singh (Expert)
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02 May 2011
U/s 14 - CST on Declared Goods to be @ 5% from 01-04-2011
It has been proposed in the Budget 2011-12 to increase the ceiling of 4% on declared goods under section 14 of CST Act to 5%. Currently State Governments cannot levy VAT more than 4% on declared goods.

Consequently all the goods in Schedule C of MVAT Act 2002 shall be taxable @ 5% from 01-04-2011 (as requisite amendment is done in MVAT Act 2002 through Maharashtra Finance Budget proposal announced on 23-03-2011).

Declared goods are those goods which are of special importance and have been defined u/s 14 of CST Act 1956. This increase has been made in view of recent increase in the VAT slab rate of 4% to 5% by many states.

This proposed amendment has been prescribed in clause 74 of the Finance Bill 2011-12 which runs as under:

74. "In section 15 of the Central Sales Tax Act, 1956, in clause (a), for the words "four per cent.", the words "five per cent." shall be substituted"

The relevant notes on clause 74 runs as under:

"Clause 74 of the bill seeks to amend section 15 of Central Sales Tax Act, 1956, so as to increase the ceiling imposed through the Central sales tax on the power of the States to levy VAT on the "declared goods" from 4 per cent to 5 per cent."