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Tax Concessions:-

  • Sugarcane Purchase Tax for the year 2016-17 exempted from giving fair and remunerative price to the farmers. The condition regarding the export of sugar for the exemption for the year 2015-16 is removed.
  • VAT exemption to Amsul along with the exemption to essential commodities like rice, wheat, pulses and its flour and also turmeric, chilies, tamarind, jaggery, coconut, coriander seeds, fenugreek, parsley (suva), papad, wet dates.
  • VAT exemption on Solapuri chaddar and towels continues.
  • VAT on Geo Membrane required for farm pond reduced from 6% to 0%.
  • To examine the fertility of soil for farming, VAT on Soil Testing Kit reduced from 13.5% to 0%.
  • VAT on Milk Testing Kit for checking adulteration of milk reduced from 13.5% to 0%.
  • VAT on Aviation Turbine Fuel for flights under the Regional Connectivity Scheme reduced from 5% to 1%.
  • VAT on Card Swipe Machine for cashless transactions reduced from 13.5% to 0%.
  • VAT on Gas and Electric Incinerators reduced from 13.5% to 0%.

Tax concessions to Industries:-

  • VAT exemption on Sweet-Corn processing industry from 1st April 2005 to 31st March 2016.
  • VAT exemption on Textile Processing industry from 8th April 2011 to 30th April 2012. Approximately 200 units would benefit.
  • VAT exemption on Yarn Sizing and Warping industry from 1st April 2005 to 31st March 2016. Approximately 300 units would benefit.

The increase in Taxes:-

  • VAT rate of 23.08% on MRP of the country and foreign liquor increases to 25.93%.
  • Tax on weekly lottery increased from Rs.70,000 to Rs.1 lakh.

Administrative changes:-

  • Establishment of three new benches of Maharashtra Sales Tax Tribunal.
  • VAT appeal 10% part payment necessary subject to maximum payment of Rs.15 Cr.
  • VAT dues can be recovered from the Directors of the private company.
  • Profession Tax assessment for unregistered period reduced from eight years to four years.
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  • The POS machine will be exempted from tax and also stamp duty on its agreement will also be exempted.
  • For the heavy good vehicles weighing more than 12000 kilograms, VAT rate will be changed from 14% to 12%.
  • The airports and small landing areas excluding of Indore, Bhopal, Gwalior, Jabalpur, Khajuraho where the sale of A.T.F on which VAT rate of 4% will be converted to  1%.
  • The Vat rate at items of A.T.F on  Gwalior, Jabalpur, Khajuraho airports will be taxable at 4%.
  • The Vat rate at items of A.T.F on Indore and Bhopal airports on which present rate is 4% will be taxable at 25%.
  • On the basis of authentication of Handicap Perspective Authority vehicles made available will be taxed at 5%.
  • Central Sales Tax Act, Entry tax Act, Madhya Pradesh tax on Entertainment, Luxury and Advertisement tax will be levied continuously till GST comes.
  • In order to leave any property right in family’s property by any family member, previously tax was levied at 2.5% now it will be taxable at 0.5%. Further indemnification bond on which tax at 0.5% is leviable is now taxable at flat Rs 1000.
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VAT Amnesty Scheme:-

As in KGST, they intend to launch an extensive amnesty scheme for redressing the disputes by granting the relief from excessive penalties and interest. The following amnesty scheme will be implemented in the Value Added Tax Act 

1) In the case of VAT dealers, if the tax arrears of the assessment years from 2005-06 to 2010-11 is completely remitted, the interest thereon and 70% of the penalty amount and interest on the penalty, shall stand waived.

2) All arrears pertaining to a year shall be settled together

3) An assessee opting to settle arrears under this scheme shall withdraw all cases, revision, and appeals pending before any forums.

4) Tax arrears and interest shall be calculated as on the date of submission of application.

5) Arrears under CST Act for the above period can also be settled under this Scheme.

6) The last date for filing option under this scheme shall be 30th June 2017. Amount reckoned under the scheme shall be paid by equal installments on or before 31st December 2017.


Works Contract:- 

  • There were certain disputes in determining the nature of works contract involved in the installation of kitchen cabinet works, aluminum fabrication works, air-conditioning plant installation. In these cases, the tax determined under compounding scheme was re-assessed and taxed at scheduled rate. Interest and penalty were also imposed.
  • In cases were compounded tax was paid by the contractors for such contracts, they shall be exempted from paying tax at scheduled rate, provided all the purchases are from within the State and such contractors shall pay 2% tax for total contract amount over and above compounded tax already paid.
  • This scheme will be applicable for the assessments up to the FY 2014-15.



  • The previous Government had exempted tax under VAT for natural rubber and its variants for the period from 20th December 2014 to 1st March 2015 by notification. But necessary provisions to this effect were not incorporated in the Finance Act.
  • Hence, rubber dealers are liable to pay tax and interest for the above period. It is announced that natural rubber and its variants are exempted from tax for the period from 20th December to 31st March 2015. 
  • The tax rate for solar energy devices and spare parts is currently 1%. But 14.5% is levied for the installation of such devices, considering it as works contract. The tax rate of such works will also be fixed at 1%. This will have retrospective effect from 01.04.2013 from the date on which the tax rate of solar energy devices was reduced to 1%. But, tax paid during this period based on the assessment done will not be refunded. 
  • Packing materials used in exporting goods is liable to be taxed. The packing materials used in exporting goods will be exempted from tax, subject to conditions, for the period from 2005- 06 up to the year on which the Division Bench of the Hon’ble High Court has rendered its judgment in such cases. Tax already paid during this period will not be refunded.


Presumptive Tax Dealers:- 

  • In the 2016-17 budget, an amnesty scheme was declared for presumptive tax dealers in VAT Act. To settle the cases as per the scheme, total turnover will be calculated adding 5% gross profit on unaccounted purchases along with the sales turnover declared as per return.
  • If the total turnover calculated for a year by adding 5% gross profit on unaccounted purchase is below the threshold limit as per Sec.6 (5), then such dealer shall pay tax at the rate of half percent. If the turnover thus calculated is above the threshold limit as per Sec.6 (5) and up to rupees one crore, then the dealer shall pay tax at the rate of 1% for the turnover above the threshold limit.
  • And if the turnover is above rupees one crore, the dealer shall pay tax at the rate of 2% for the turnover above rupees 1 crore and 1% for the turnover in between threshold limit and up to rupees one crore. In general, 0.5% shall be paid for the turnover up to threshold limit. Option to settling under the scheme shall be submitted before the assessing authority on or before 30th June 2017.
  • The assessing authority shall intimate the applicant, the amount to be paid as per the scheme within 15 days from the date of receipt of the option. The applicant shall pay 30% of the amount within 15 days from the date of intimation and balance amount on or before 31st December 2017. The dealer shall opt this scheme for all those years for which he had unaccounted purchases. Assessment and revenue recovery steps will be intensified for those who have not opted under this scheme.
  • No statutory re-examination or refund will be allowed in cases settled under this scheme. This scheme is also applicable for those dealers who have opted amnesty scheme for 2016-17 but had defaulted payments. There will be no other changes in the conditions prescribed under the amnesty scheme for 2016-17.
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  • The tax exemption on paddy, rice, wheat, pulses and products of rice, Ragi Rice (processed Ragi) and wheat will continue. Further flour of Navane, Same, Aaraka and Baragu Siridhanyagalu) & husk of coconut and pulses will also be exempt from tax.
  • Amendments to section 40 of the KVAT Act, 2003 to extend the period of limitation for assessments or reassessments pertaining to tax periods of 2012-13 and 2013-14 by one year. Further amendment to section 40 to exclude period taken for disposal of revision proceedings in computing the period of limitation for assessment or reassessment.
  • A Karasamadhana scheme is proposed to waive 90%of penalty and interest on payment of full tax and remaining 10% of penalty and interest by 31st May 2017.
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  • A self-assessment scheme for dealers having the turnover of Rs. 2 Crore to be framed.


  • Lump sum tax payment scheme for traders up to a turnover of Rs. 40,00,000.


  • Entry Tax to be reduced from 1 % to 0.5 % for existing industries only.


  • Additional Good Tax on iron, steel & plastic goods will be reduced.
  • The revised rates of electricity duty for new industries will also be extended to new hotels
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