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8% floor, Vikrikar Bhavan,
Mazgaon, Mumbai-400010.
TRADE CIRC
No. VAT/AMD-2011/1A/ADM-6 Mumbai, Dt.04-05.2011-
Trade Cir. No. 8 T of 2011
Sub ; Budget 2011-12: Taxation of liquor.
Ref; (1) Mah. Act No. XV of 2011 dated 21 April 2011.
(2) Notion No. VAT-1511/C.R.57/Taxation-1 dated 30"
April 2011.
Gentlemen/Sir/Madam,
‘A Scheme for taxation of liquor was announced in the budget for 2011-12 by
the Hon’ble Dy. Chief Minister. To give effect to this, amendments are made to the
Maharashtra Value Added Tax Act, 2002 and Rules, 2005. The Scheme and the
amendments are as follows:
1. (i) Amendment to section 4
‘The section 41 relates to exemptions and refund. A new sub-section,
namely sub-section (5) is added enabling the State Government to issue
notification in respect of liquor, exempting tax wholly or partly in respect of
class or classes of dealers or class or classes of sales, subject to such
conditions as may be prescribed.
(ii) Amendment to Schedule entries:
The Schedule rate of tax on liquor under entry 1, 2 and 3 of Schedule D to
the Maharashtra Value Added Tax Act, 2002 is revised to 50% as against
25% earlier. However, this is subject to 25% of MRP as notified. There is
no change in the rate of tax on wine.
2, Amendment to Rules:
Rule 54() is substituted. By this substitution, liquor covered by entry 1, 2
and 3 of Schedule D is put in the negative list. No sct-off will be available on
purchases of liquor covered by entry 1, 2 and 3 of Schedule D. This does not
include wine, which is covered by entry 3A of Schedule D.3. Notification under section 41 (5):
A notification dated 30% April 2011 is issued in respect of taxation of
Hiquor.
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4. The
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‘The notification applies to liquor covered by entry 1, 2 and 3 of Schedule
D. It does not apply to wine.
It applies only to registered dealers.
The notification is effective from 1* May 2011.
taxation in respect of various class of dealers is as below:
Manufacturers:
Manufacturers of liquor holding licence in PLL, BR-L (for beer) and CL-I
under the Maharashtra Prohibition Act, 1959 will pay tax at Schedule
rate subject to the limit of MRP X 25/125. MRP is maximum retail price
as printed on the bottle. They can collect this tax separately. They will
have to mention MRP alongwith sale price in the sale bills issued by
them. Set-off on inputs for manufacture of liquor will be available.
‘Wholesalers:
Wholesalers holding licence in FL-I, CL-II will be exempt from tax, if they
have purchased liquor from registered dealer within State on which tax is
paid or has become payable at earlier stage. It means exemption is
available if goods have borne tax at earlier stage in the state.
Wholesalers importing liquor from outside the State or from other
country will pay tax at Schedule rate subject to the limit of MRP X
25/125 on their sales of liquor brought from other States or from outside
India. They can collect tax on sales of imported liquor. They will have to
mention MRP alongwith the sale price in the sale bills issued for such
sales.
No set-off will be available on liquor purchased from registered dealers
within the state.
) Retailers and Country liquor Bar:
Retailers holding licence under FL-ll, FL-BR-Il, CL/FL/TOD-IIl and
Country liquor bar holding licence CL-III will be exempt from tax on sales
of liquor purchased from registered dealers within State. This exemption
is available if liquor has borne tax at earlier stage in the state.(i)
(vy
Hotels, Bars, Restaurants and Clubs ( 3 star and below):
Bars, Restaurants and Clubs holding licence in FL-IIl or FL-IV or E with,
grading 3 Star and below will be required to pay tax at 5% on the actual
sale price of liquor which is purchased from registered dealers within
state and on which tax is paid or has become payable at earlier stage.
‘They can collect tax separately. No set-off is available on purchases.
Hotels, Bars, Restaurants and Clubs{ 4 star and above):
Hotels, Bars and Restaurants with grading 4 Star and above will be
required to pay tax at 20% of their actual sale price, if the liquor is
Purchased from registered dealers within State and on which tax is paid
or has become payable at earlier stage.
If liquor is imported from other States or from out-side the country,
then in addition to 20% above, they will be required to pay tax at
Schedule rate subject to the limit of MRP X 25/125 of such liquor sold.
They can collect tax in the sale bills. No set-off is available on
purchases of liquor.
Closing stock held on 30% April 2011:
‘The Schedule-II appended to the above notification provides for taxation
of liquor held in closing stock on 30% April 2011.
All the dealers, except manufacturers, shall furnish a statement of
closing stock of goods mention in entry 1, 2 and 3 of Schedule D to MVAT Act,
2002 as on 30% April 2011, in the proforma appended to the notification by 31%
May 2011. This stock statement is to be submitted by the dealers in Mumbai to
the Joint Commissioner of Sales Tax (EIU) and in mofussil areas to respective
Divisional Joint Commissioner of Sales Tax (VAT Adm.). Set-off on stock will
not be available if the statement in proforma above is not furnished by the
prescribed date. If set-off is already claimed on these purchases, the same will
be disallowed.
Taxation of Stock for various categories of dealers is as follows:
Wholesalers holding licence in FL-I or CL-I and retailers holding licence
in FL-Il, FL-CL-TOD-II, will be taxed at Schedule rate subject to the limit
of 25/125 X MRP. Set-off will be available on purchases subject to
submission of stock statement.
Bars and Restaurants and Clubs (3 Star and below) holding licence in
FL-Il, FL-IV, or E or Country liquor bar holding licence in CL-III shall
pay tax at 5% of actual sale price in addition to tax at Schedule rate
subject to the limit of 25/125 X MRP. Set-off will be available on
corresponding purchases subject to submission of Stock statement
mentioned above.. Bars and Restaurants (4 star and above} shall pay tax at 20% of actual
sale price in addition to tax at 25/125 X MRP. Set-off will be available
on corresponding purchases subject to submission of Stock statement as
mentioned above.
6. Canteen Stores Department:
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(iv)
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Canteen stores Department (CSD) including Naval Canteen Stores
holding licence as wholesalers or retailers in FL-I, FL-ll, CL-Il will be
taxed in the same manner as wholesalers and retailers above. They will
have to furnish the statement of closing stock held on 30% April 2011.
‘The notification dated 27% July 2006 in respect of Canteen Stores
Department issued under section 8(3B) of MVAT Act, 2002 has been
amended w.e.f, 1* May 2011. This notification exempts sales by Canteen
Stores Department to its units and members of armed forces, except the
goods shown in Appendix to the notification.
Country liquor and IMFL were covered by entry (1) and (2) of this
appendix. Entry (1) of appendix, namely country liquor is deleted and
entry (2) is modified to include wine only instead of IMFL. The effect of
this modification is that, sales of country liquor and IMFL, including Beer
by Canteen Stores Department will be exempt.
A condition has been added in column (4) of the said notification to the
effect that sales will be exempt only if tax is paid or has become payable
at earlier stage.
In case of imports by Canteen Stores Department, the sale will be
taxable as in case of wholesalers importing liquor.
7. This circular cannot be made use of for legal interpretation of provisions of law
as it is clarificatory in nature. If any member of the trade has any doubt, he may refer
the matter to this office for further clarification.
8. You are requested to bring the contents of this circular to the notice of the
members of your association.
(SANJAY BHATIA)
Commissioner of Sales Tax,
Maharashtra State, Mumbai.No. VAT/AMD-2011/1A/ADM-6, Mumbai, Dt. 044-05. 201{
‘Trade Cir. No. & T of 2011
1. Copy forw: :
a. All the Addl. Commissioners of Sales Tax in the State.
b. All the Joint Commissioners of Sales Tax in the State.
¢. The Joint Commissioner of Sales Tax (Mahavikas) with the request to upload
this Trade Circular on the Departments web-site.
‘d. All the Sr. Dy. Commissioners of Sales Tax in the State.
e, All the Dy. Commissioners of Sales Tax in the State.
f All the Asstt. Commissioners of Sales Tax in the State.
& All the Sales Tax Officers in the State.
2. Copy forwarded with compliments for information to:
a. The, Deputy Secretary, Finance Department, Mantralaya, Mumbai.
b. The Under Secretary, Finance Department, Mantralaya, Mumbai.
c. The Accounts Officer, Sales Tax Revenue Audit, Mumbai and Nagpur.
3. Copy to all the Desks and Desk Officers in the office of the Commissioner of Sales
Tax, Maharashtra State, Mumbai.
[Ae “T°
(G.B.Indurkar)
Joint Commissioner of Sales Tax,
(HQ)1, Maharashtra State, Mumbai.