Goa‘s per capital income at
Rs. 2,57,490/- (Rs. 21,450 per month) is the highest in India. And yet Goa since 2012-13 has experienced a slowdown in line with the general trend in India’s economy but made worse by the mining ban in the State which resulted in a revenue loss of
Rs. 1,300 crore per year. Due to which the State GSDP slowed down to 4.17 % in 2012-13. But green shoots are showing up in the economy and the State GSDP has picked up to around 8%.
Goa budget 2016 has focused on physical and social infrastructure. Despite State assembly elections round the corner in early 2017, the State fiscal deficit has been maintained below the ceiling of 3% prescribed by the Goa Fiscal Responsibility Budget Management Act. In fact the State Finance Minister who is also the Chief Minister of the State, Mr. Laxmikant Parsekar, has presented a revenue surplus budget for 2016-17 even after factoring for implementation of seventh pay commission for its 50,000 plus employees. The Gross State Domestic Product is expected to grow at approximately 10% to
Rs. 70,400 crore.
The tax proposals in the budget are broadly aligned towards moving to a GST regime.
The threshold turnover limit for compulsory registration under Goa VAT has been enhanced from
Rs. 5 lakh to Rs. 10 lakh. Similarly the turnover limit in case of importer or manufacturer has been increased from
Rs. 1 lakh to Rs. 5 lakh. This will provide relief to small businesses.
Goa VAT Act u/s. 10 does not provide for refund of excess Input tax credit except for exports. Instead it provides mechanism for carry forward of the excess ITC. It is proposed that a Scheme will be notified to adjust and refund excess ITC in varying proportions during the coming years and settle disputes relating to ITC to minimise legacy issues and reduce sudden financial impact when transiting to GST. This measure will also unlock funds blocked in working capital for dealers who have large carry forward Input tax credits.
On similar lines as a measure of transition to GST and in line with ease of doing business there is a new dispute settlement scheme proposed. This scheme will apply to disputed demands pending before various Courts and with Appellate Authorities. However cases involving non-payment of tax will not be covered under the scheme. This scheme will cover disputes under Goa VAT, Goa Entry tax, Goa Luxury tax and Goa Entertainment tax laws.
10% of disputed dues will now have to be deposited before preferring First appeal under Goa VAT Act. There is already a provision to deposit 50% of disputed dues before second appeal; Administrative Tribunal. This new proposal of 10% is on similar lines. However a large number of disputed dues are on account of demands arising due to non receipt of C forms. There was a need for exempting pre deposit of disputed dues in such cases which has not happened.
The budget has also tried to address one of the major impediments to manufacturing units operating out of Goa with regard to their claim of input tax credit against ‘Restricted tax Invoices’. Restricted trade invoices are issued by those units which are covered under the Goa VAT deferment cum NPV compulsory payment scheme 2005 whereby units were allowed to retain 75% of the Vat collected. The Commercial tax department has been restricting ITC on Restricted tax invoices for local purchases of raw materials, packing material etc made by manufacturing units in Goa where the finished product of those units is sold inter-State or stock transferred outside Goa. In the case of inter-State sales the ITC is restricted to the actual output tax payable and on stock transferred against Form F outside Goa, ITC is fully disallowed by wrongly interpreting clause 9 of Goa VAT deferment scheme 2005 which restricted ITC only if the goods were sold/transferred inter-State in the same form in which they were purchased. This has discouraged manufacturing units from purchasing from dealers located in Goa thus affecting both the local industry as well as the manufacturers. The budget proposes to rectify this anomaly.
To encourage setting up of new manufacturing units, start-ups and expansion of existing units, scheme under section 89A of the Goa VAT Act will be formulated to give incentives like VAT reimbursement etc. based on the capital investment, employment generation and procurement of raw materials locally.
Following amendments are made in VAT rates with effect from 1-4-2016 notification no.4/5/2005- Fin(R&C) (134) dated 30-3-2016.
|
Entry No. |
Description of goods |
Schedule |
Old rate |
New rate |
|---|---|---|---|---|
|
1 |
Aviation spirit, aviation turbine fuel and A.V. Gas. other than covered by entry 34 of Schedule “B”. |
C |
12.5% |
18% |
|
8 |
Motor spirit which is commonly known as petrol including ethanol blended petrol. –
(a) sold by public sector oil marketing companies to their authorized retail outlets within the State (b) sold in the circumstances other than mentioned in clause (a) above |
C |
15% 20% |
22% 22% |
|
11 |
Regasified Liquefied Natural Gas |
C |
20% |
30% |
|
26 |
Motor Car sold by a registered dealer to defence personnel, subject to the fulfilment of conditions as may be notified by the Govt.
a) Whose cost is below Rs. 15 lakh b) Whose cost is |
C |
6.25% |
6.25%7.25% |
|
27 |
Light motor vehicle costing Rs. 15.00 lakh or above. (below |
C |
– |
15%Rs. |
|
28 |
Two wheeler i.e., motor cycle or scooter, costing |
C |
– |
15% |
|
72 |
Country liquor in the form of cashew or palm feni, produced as a part of seasonal activity by local individuals commonly known as bhaticars, other than distillery and bottling units. (Country liquor as defined in the Goa Excise Duty Act, 1964 (Act 5 of 1964) other than that covered by Entry (72) of Schedule ‘D’ continues to be taxable at 5% under Entry 157 of schedule B) |
D |
5% |
Exempt |
Luxury tax rates as on 1-4-2016
By notification No.3 0/1/2006-Fin (R & C) (30) dated 30-3-2016, luxury tax rate is made applicable for room charges exceeding
Rs. 750/- as against Rs. 1,000/- earlier. The rates remain unchanged.
‘SCHEDULE – I’
[See Sections 9(2) and 9A]
|
Serial No. |
Turnover of Receipts |
Rate of Tax |
|---|---|---|
|
(1) |
(2) |
(3) |
|
(a) |
Where the charge for the luxury provided in a hotel is not exceeding |
Nil |
|
(b) |
Where the charge for the luxury provided in a hotel is exceeding |
6% |
|
(c) |
Where the charge for the luxury provided in a hotel is exceeding |
9% |
|
(d) |
Where the charge for the luxury provided in a hotel is exceeding |
12% |
|
(e) |
Where the hotel is a club or any other entity wherein luxury provided to its members/guests under time share agreement or any other similar system, and wherein the facility of availing residential accommodation by such members/guests during the given period in a year is allowed upon lump sum payment against his/her membership. |
Ten paise in a rupee, with a deemed room receipt ofRs. |
|
(f) |
Where any room in a hotel or guest house registered under the Goa, Daman and Diu Registration of Tourist Trade Act, 1982 (Act 10 of 1982) are leased by the hotelier to any company or a person on monthly basis to provide accommodation either as rest house or guest house and the charge for such room exceeds |
6% |
Luxury tax exemption in room rates during off season w.e.f. 1-4-2016: Exemption is granted in luxury tax rates @ 25% on applicable tax rate as against 60% exemption on applicable rates till 31-3-2016 during the period from 1st June to 30th September where the room rate per room per day is less than
Rs. 20,000/-, subject to conditions that tax is paid, returns filed within the time limit and that there are no outstanding dues or arrears at the time of claiming exemption.
Hence effective luxury tax rate from 1st June to 30th September 2016 will be 75% of applicable rates subject to said conditions.
And finally those planning to visit Goa to experience its thriving Casinos will now have to shell out more towards entry. Entertainment tax for entry fee in Casinos is increased from
Rs. 700/- per person to Rs. 1,000/- per person.
In conclusion, Goa budget 2016 is a well balanced budget giving a thrust to capital investment, skill development, employment generation, creation of infrastructure and resolution of substantive issues on Goa VAT.