Maha Budget 2022: State cuts tax on CNG, PNG; GST amnesty scheme proposed

Furthermore, deputy chief minister and finance minister Ajit Pawar announced that the tax levied on the newly launched waterway services will be waived off for three years.

Mumbai: In a piece of good news for the public battered by inflation, the state government has decided to significantly reduce the tax on Compressed Natural Gas (CNG) and Piped Natural Gas (PNG). The tax cut on CNG will benefit a significant number of vehicle owners, including cab drivers, while that on PNG will lead to lower bills for households in Mumbai and other cities.

In his budget speech, Pawar announced that the rate of value-added tax charged on natural gas is reduced from 13.5 percent to 3 percent (Anshuman Poyrekar/HT PHOTO)

Furthermore, deputy chief minister and finance minister Ajit Pawar announced that the tax levied on the newly launched waterway services will be waived off for three years. This is expected to boost ridership of the water taxi service between Mumbai and Navi Mumbai, which has seen low commuter response due to high fares.

The budget also has tax concessions aimed at boosting the gold and silver jewellery industry and the construction sector, and an amnesty scheme for those having arrears in taxes.

In his budget speech, Pawar announced that the rate of value-added tax charged on natural gas is reduced from 13.5 percent to 3 percent to boost the use of clean and environment-friendly fuels in the state. This would apply to CNG and PNG, he said.

The state is expected to suffer a revenue loss of ₹800 crore due to a tax cut.

Once implemented, the approximate prices of CNG and PNG are expected to reduce by ₹2 each. Taxi unions and CNG suppliers have welcomed the state government’s decision to lower taxes.

“We welcome the state government’s move to reduce VAT on CNG in Maharashtra. VAT reduction from 13.5 percent to 3 percent is quite significant and will greatly benefit the consumers and will lead to a significant increase in CNG consumption in the state,” said Deepak Dala, director, Torrent Gas that supplies CNG and PNG in Pune.

AL Quadros, leader of the Mumbai TaxiMen’s union, said, “It is a positive move but the reduction is likely to be only by ₹2. We will come to know the exact reduction in CNG prices on Saturday after Mahanagar Gas Limited (MGL) makes the changes.”

To promote water transport, the tax levied by the Maharashtra Maritime Board on passengers as well as pets, vehicles, goods etc. travelling by ferries and Ro-Ro boats on newly launched waterways from January 1, 2022, is being waived for three years, Pawar said.

This is expected to cover the water taxi service between the cruise terminal at Bhau cha Dhakka in south Mumbai and Belapur jetty in Navi Mumbai. The high fares— ₹800 to ₹1,200 for a one-way journey on a speedboat that takes around 30-40 minutes and ₹290 for a catamaran ride—is one reason for the depressed demand. MMB officials said they levied 10 percent of the ticket charges as tax.

Pawar also proposed an amnesty scheme for the GST department, called the ‘Maharashtra Settlement of Arrears of Tax, Interest, Penalty or Late Fee Scheme-2022.’ It will cover various taxes levied by the Sales Tax department before the introduction of the GST Act and its duration will be from 1 April 2022 to 30 September 2022.

“I am completely waiving off the arrears in cases where arrears are ₹10,000 or less per year as per any statutory order passed under the various tax laws implemented by the department. As a result, small dealers will benefit in almost one lakh cases,” said Pawar.

“Dealers having arrears as on the 1st April 2022 up to ₹10 lakhs or less as raised in the statutory orders will have the option to pay a lump sum amount of 20 percent of the total arrears instead of calculating the amounts payable on account of undisputed tax, disputed tax, interest, penalty as per the proportions provided in the Scheme. On payment of a lump-sum amount of 20 percent, the waiver will be granted to the remaining 80 percent of the arrears. As a result, medium dealers will be benefited in almost 2.20 lakh cases.”

Officials from the GST commissionerate said that an amount of around ₹10,000 crore that was under dispute would be covered under this amnesty scheme. “Of the around 4 lakh cases under dispute, about 3 lakh involve arrears of up to ₹10 lakh or less,” the official noted.

“Any amnesty scheme depends on the response. It is not compulsory, but optional. Merchants will take benefit if they find it attractive,” he added.

Amnesty schemes announced in 2017 and 2019 have seen the government receive ₹1,953 crore and ₹3,436 crore, respectively, while waiving off around ₹2,000 crore and ₹4,000 crore, respectively, as amnesty.

“To give impetus to the gold and silver jewellery industry, refineries and exports and to generate employment in the state and curb tax evasion, it is proposed to waive the current stamp duty of 0.1 percent levied under the Maharashtra Stamp Act on gold-silver delivery order documents imported into the state of Maharashtra. Due to the above tax concession, there will be a revenue shortfall of around ₹100 crore,” said Pawar.

To incentivise the construction industry, the period in which stamp duty paid on the earlier deed to be adjusted against subsequent deed is increased from one year to three years for pending penalty dues.

“Amnesty Scheme under Stamp Act is proposed from 1 April 2022 to 30 November 2022 for pending penalty dues. Due to this concession under Amnesty Scheme 2022, there will be a shortfall of ₹1,500 crore out of outstanding penalty dues,” he noted.

Dr Niranjan Hiranandani, vice-chairperson NAREDCO and MD, Hiranandani Group, welcomed the budget and said the real estate had gained from previous measures by the state government such as stamp duty exemption and reduction of premium.

“This budget also raised positive expectations on part of the real estate industry. The amnesty scheme will enable those who have not earlier registered documents to make the payment without penalty. This is a positive move by the government and will bring additional revenue and result in no shortfall in revenue collection,” he said, adding that the move augurs well for investors and it will result in documents being registered.