Amendments to the Bombay Sales Tax Act, 1959

By amending clause (i) of sub-section 1 of section 7, the State Government is introducing multi-point (VAT) tax on Iron & Steel goods covered by schedule entry B-6. The date of effect of levy of VAT on these goods is yet to be notified.

By amending section 9, levy of Turnover Tax has increased to @1.5% with effect from 1st May 2002 on the dealer having annual tax liability (Sales Tax + Purchase Tax) exceeding Rs. One crore before adjustment of set-off.

By amending Section 10, Resale tax on schedule C items has been increased from 0.2% to 0.5% with effect from 1/5/2002.. Further, goods subjecting to Sales Tax @ 4% as per schedule entry or as per notification entry are also made subject to resale tax @ 0.5% w.e.f. 1/5/2002. However, Drugs & Medicines covered by schedule entry C-II-37 are excluded from the levy of resale tax. If the State Government intends to exempt any item from RST, then it will issue notification form time to time. RST is not applicable on the items, the sales tax rate of which is less than 4% either by schedule entry or by notification entry in Group A.

New section 33 C is inserted with retrospective effect from 1st July 1981 to provide that when two or more companies are to be amalgamated by the Order of a Court or of the Central Government and the order is to take effect from a date anterior to the date of the said Order and any two or more of such companies have sold or purchased any goods to or from each other during the period commencing on the date from which the Order is to take effect and ending on the date of the order, then notwithstanding anything contained in the said amalgamation order, such transaction of sale and purchases shall be included in the turnover of sales or, as the case may be, purchases of the respective companies and shall be assessed to tax accordingly, and for the purposes of this Act, the said two or more companies shall be treated as distinct companies and shall be treated as such for the entire period upto the date of the said Order.

Section 38 has been amended to invite early payment of tax by an eligible unit holding entitlement certificate under deferment scheme of the Package Scheme of Incentives. Under this section, an eligible unit will be given an option to pay the deferred amount of the tax before maturity at discounted net present value instead of making full payment on the expiry of the scheme. However, a notification prescribing net present value and other conditions is yet to be published.

By notification dated 9th May 2002, the Government has published fresh list of Industrial Inputs and Packing Materials subject to 4% ST + TOT + SC. This notification supersedes earlier notification. The effective date of new notification is 10th May 2002. All the items covered in the earlier notifications are covered in this notification. In addition, some new items of raw materials are added. Readers are requested to go through the notification for further detail.

Sr. No.	Schedule Entry	Noti. Entry	Rate of tax	Description of goods	Effective date	Comments
1.	A-4		Nil	Bread sold under registered trademark is excluded from schedule A	1st May, 2002	Bread sold without registered trademark is still tax free
2.	B-6		4%	Sponge Iron	11th May, 2001	"Sponge Iron" is added in the list of declared goods as a consequential amendment in view of the amendment carried out to the CST Act, 1956.
3.	C-I-3A		4%	Bread in loaf or roll or slices toasted or otherwise when sold under a registered trade mark.	1st May, 2002	New entry is inserted to provide for levy of sales tax @ 4% on Bread sold under registered trademark
4.	C-II-32		9%	The words "whether medicated or not" deleted from the entry for tooth powder, toothpaste & toothbrush.	1stMay, 2002	Now, medicated toothpaste, toothpowder or tooth brush may be covered in C-II-37.
5.	C-II-34		9%	Drugs covered by Drugs & Cosmetics Act, 1940	1st May, 2002	Now medicated cosmetics, soap, hair creams etc. may be covered in C-II-37.
6.	C-II-37		9%	Drugs covered by Drugs & Cosmetics Act, 1940	1st May, 2002	Rate of tax increased from 8% to 9% consequent to removal of resale tax.
7.	C-II 22(2)	A -16		Spirit, Wines Fermented liquor and mild Liquor (Strong and mild Beer)	1st April, 2002	Tax on sales of fermented liquor and mild liquor is made applicable on all stages. It means multipoint tax is made applicable on beer. Turnover tax, surcharge and resale tax exempted by this notification.
8.	C-I-10 & C-II-97	A -47		Bullion and articles made from bullion	1st April, 2002	Rate of sales tax reduced to 0.5% from 2%. Turnover tax and surcharge exempted.
9.	C-II-146	A-65	8%	Bearings	1st April, 2002	The period of concession is extended upto 31st March 2003
10.	C-II-152	A-143	8%	Paper napkins	1st May, 2002	New Notification entry added. Rate of sales tax reduced to 8%. TOT & SC applicable
11.	C-II-152	A-144	8%	Unbranded sanitary napkin	1st May, 2002	New Notification entry added. Rate of sales tax reduced to 8%. TOT & SC applicable
12.		A-145	4%	a) Scrub pads of polyester with or without sponge, which are used for cleaning household utensils. b) Metal port scrubbers & cleaners which are used for cleaning household utensils.	1st May, 2002	New Notification entry added. Rate of sales tax reduced to 4%. TOT & SC applicable
13.		A-146		Drugs & Medicine covered by entry 37 of Part II of Schedule 'C'	1st April, 2002	Resale tax is exempted retrospectively by inserting new notification subject to the condition that dealer has not collected resale tax or has not paid the tax in or has not paid the tax in
14.		A-147		Purchase of goods by a Registered dealer from the persons who are not dealers or from dealers who are not Registered dealers and contained in the nominal accounts debited to the profit and loss account.	1st April, 2002	Manufacturer may pay purchase tax calculated @ 13% on 0.25% of total expenses debited to profit and loss account. The manufacturers may pay purchase tax calculated @ 13% on 0.4% of total expenses debited to profit and loss account. The concession is optional. Any dealer may opt to pay tax on such purchases on the basis of production of bills etc. and by proving that he is liable to pay no purchase tax or, as the case may be, liable to pay by way of purchase tax an amount smaller than the amount payable as per this entry.
15.	C-II-102(2)	A-148	4%	Sales by a Registered Dealer, to a Manufacture of motor vehicles having engine capacity of 950 CC onwards covered by Schedule entry C-II-102	1st May, 2002	New entry 148 is added. Rate of sales tax reduced to 4% and whole of turnover tax and surcharge exempted. Purchasing dealer shall not be entitled to claim set-off of sales tax paid on his purchases. Goods purchased shall be used in the Manufacture in the State of Maharashtra of motor vehicle as mentioned.Purchasing dealer has tofurnish declaration in form A-1, and has to be certified by Commissioner of Sales Tax for this purpose.
16.	C-II-126	A-149	4%	1. Automated Machines (ATM) 2. Automatic Cash Dispenser. 3. Automatic MICR Cheques Reader. 4. Automatic MICR Cheques Sorter	1st May, 2002	Rate reduced to four percent. TOT & Surcharge applicable.
17.	C-II-37	A-151			1st May, 2002	Whole of tax is exempted. List of 99 drugs is given in the notification.
18.		G-5	whole of tax		1st May, 2002	Notification Entry G-5 & Form G-1 are amended. Now a trader exporter shall be entitled to purchase packing accessories including labels printed or not, woven, labels printed or not, paper tags, price stickers etc. against form G-1 without paying tax.
19.		G-6	whole of tax			Industrial unit in SEZ shall be certified by Commissioner of Sales Tax & also by the designated Development Commissioner of SEZ. The goods purchased shall be used in the manufacture of goods to be exported or for the packing of goods to be exported or for resale to other industrial unit in SEZ. Purchasing dealer has to furnish declaration in form GE.

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