Without making a fuss, the administration has decided to exempt blankets, towels, dry fruits and a few other commodities from VAT, even as legislature is meeting on February 24
The Democratic Front government in the state is walking a tightrope it is on an appeasement spree, but it can’t tom-tom the fact. For instance, the state has decided to issue an ordinance to extend the period of tax holiday for food grains and, most importantly, has clubbed a few other commodities into the list of these items.
Prithviraj Chavan. File pic
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The Maharashtra cabinet took this decision in its meeting on February 12 and ratified it on Tuesday. But, the matter has been kept under wraps to avoid any kind of publicity. Reason? The state wanted to exempt these items from the tax net till March 31, 2015 without any public debate for now.
According to sources, ideally, the government should have introduced these proposals before the state legislature, which is going to have a four-day session from February 24. But, the decision would have raised hackles among the opposition, as the annual budget, for 2014-15, will be introduced during the monsoon session in July.
The exemptions given to all the items would have ended on March 31, the last day of the current financial year, and tax collection would have started on April 1 this year. But, the decision was taken to keep these items out of the ambit of the tariff net for yet another fiscal year, sources said.
The items clubbed with food grains are Solapuri blankets, towels, dry fruits, wet dates, etc. While the blanket lobby is strong, particularly in Solapur, the lobby of raisins and currants is strong in Mumbai and Western Maharashtra districts of Sangli, Solapur and Kolhapur, along with Nashik from North Maharashtra. To keep all the stakeholders in good humour, the government has also decided to continue with 5 per cent VAT on packaged tea powder.
Ever since the state introduced value added tax (VAT) that replaced sales tax, food grains have been granted exemption every financial year. For the current fiscal, the immunity is for rice, wheat, pulses and their flour, along with turmeric, chilli, tamarind, jaggery, coconut and certain other spices. Every year, the state exempts these items from tax net through the regular budget.
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