The Maharashtra Government will not be revoking an amendment in the Maharashtra Value Added Tax Act preventing companies having mega units from accelerating their recovery of investments, said Dr K Shivaji, Acting Industries Secretary of the State Government. The March amendment has been a contentious issue with the industry, with large automobile and engineering companies threatening to leave the State. Dr Shivaji said that the 52(A) amendment to the Maharashtra VAT Act has prevented companies from claiming higher Input Tax Credit (ITC). The cancellation of the amendment is not possible since it has already been enacted. However, there could be a possibility of giving some “other form of incentives” to these companies, he said. ITC is a refund given by the VAT Department to the companies upon payment of VAT. It is a form of incentive for setting up industrial units in the state. Dr Shivaji said that before the amendment came into force, companies were setting up subsidiary marketing companies, which helped them accelerate their ITC claim. The money, which was to be claimed in 20 years, could be taken back in five years due to the formation of the subsidiary, he said.
Source : The Hindu Businessline
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