Salient features

 1.  This Act was first introduced by an ordinance on 30-9-1987. Subsequently, it was replaced by Maharashtra Act No. XLII of 1987 from 18-12-1987. Prior to this Act, numerous manufacturers and distributors in motor vehicles opened their depots in Union Territories or other States where tax on sales was drastically low. As a result, there was continuous drain on the legitimate revenue of the State of Maharashtra. With the view to compensate the State for the loss of legitimate Sales Tax Revenue in respect of Motor Vehicles, this tax was introduced. This entry tax is leviable on the purchase value of motor vehicles brought into Maharashtra from other State/Union Territories, for use, consumption (w.e.f. 1-5-2012) or for sale in the State of Maharashtra, subject to the condition that the Motor Vehicle so brought is liable for registration in Maharashtra or for which an assignment of a new registration mark is required to be obtained under the Motor Vehicles Act. There is no turnover limit for liability to pay entry tax.

 2.  The rate of Entry Tax which was 15% was reduced to 8% w.e.f. 23-3-1993, which is increased to 10.5% w.e.f. 1-4-1994. The rate is reduced to 10% w.e.f. 1-9-1995. W.e.f. 1-4- 2000 rate is increased to 12%. W.e.f. 17-2-2007, the rate has been notified at 4% for Tractors specifically designed for agricultural use and at 12.5% for other motor vehicles. The tax is leviable on Motor Car, Motor Taxi Cab, Motor Cycle, Motor Cycle Combinations, Motor Scooter, etc. Tax is attracted only when all the following conditions are fulfilled.

a. The motor vehicle has entered the State of Maharashtra on or after 30-9-1987 for use or sale.

b. The vehicle has come to this State from other States, or Union Territory or from a foreign country.

c. The vehicle is a new one and not old one (i.e., it is not registered in other State for a period of more than thirty months prior to its being brought in the State).

d. The vehicle is liable for registration in this State under Motor Vehicles Act.

 3.  This tax is leviable on purchase value of the vehicle as per invoice. The purchase value defined u/s 2(l) includes value of accessories fitted, Insurance, Excise Duties, Sales Tax, Transport Fee, Freight Charges, etc. up to 31-12-2005. W.e.f. 1-1-2006, the definition has been amended to include the value of accessories fitted, excise and countervailing duties. All dealers dealing in motor vehicles as well as person bringing the motor vehicle in the state are liable to pay tax. This tax is in addition to the octroi levied by local authorities. In the case of dealers who are principal dealers in motor vehicles and who have to pay Sales Tax on their sales under the Bombay Sales Tax Act, their Sales Tax liability will be reduced to the extent of entry tax paid by them (Rule 42G). Under notification (2) issued u/s 12, exemption has also been granted to dealers in motor vehicles who are liable to pay tax under the B.S.T. Act on the sale of such vehicle. In the case of other importers, he has to pay entry tax first and claim refund to the extent of General Sales Tax paid by him in other State on his purchases. W.e.f. 1-4-1994 an importer of Motor Vehicle into the State of Maharashtra can claim the set off of the tax paid by him in other State as also the C. S. T. which he might have paid.

Importers who are liable to pay entry tax are required to file a return within 15 days from the entry of motor vehicle into the local area or before an application is made for registration of the vehicle under the Motor Vehicles Act, 1988, whichever is earlier.

From 28-8-1989 the tax is to be paid by Demand Draft or pay order drawn on any branch of the State Bank of India or of any scheduled bank or of a co-operative bank in favour of the Commissioner of Sales Tax, Maharashtra State, Mumbai.

Provisions have also been made to levy penalty for late payment or non-payment of tax.

Important Circulars

 1.  Maharashtra Tax on Entry of Motor Vehicles into Local Areas Ordinance, 1987, (converted into regular Act). (ETM-1087/1/ADM-3 Circular No. 16 of 1987 dated 19-10-1987).

 2.  Budget 1988-89 Amendment to Entry Tax (Motor Vehicles) Act, 1987. (ETM-1088/20/ADM-3 Circular No. 9 of 1988 dated 31-3-1988).

 3.  Maharashtra Tax on Entry of Motor Vehicles into Local Areas Act, 1988. (ETM/1088/1/ADM-3 dated 17-5-1988. Circular No. 17 of 1988).

 4. (i) Arrangement for Assessment of Individual Importers under Entry Tax Act from 30-9-1988 onwards. (ETM-1088/56/ADM-3 Circular No. 31 of 1988 dated 23-9-1988).

    (ii) Procedure for recovery of Entry Tax after 30-9-1988. (ETM-1088/56/ADM-3 Circular No. 31 of 1988 dated 23-9-1988).

 5.  Penalty/interest on late payment of Entry Tax for vehicles brought into Maharashtra (Local Area) prior to 1-9-1989. (ETM-1090/5/ADM-3 Circular No. 3 of 1990 dated 13-2-1990).

 6.  Changes in the tax under the Entry Tax Act, 1987. (No. ET-1193/7/ADM-11 dated 23-4-1993. Circular No. 4 of 1993).

 7.  Reduction in the rate of Entry tax on Motor Vehicles from 15% to 8% w.e.f. 23-3-1993. (ET- 1193/7/ADM/11 Circular No. 9-T of 1993 dated 21-6-1993 - 40 STR 164).

 8.  Budget 1994-95 — Changes in the tax rate under the Entry Tax Act 1987. (ET/1194/03/ADM- 11/B- Circular No. 6T of 1994 dated 31-3-1994).

 9.  Reduction of rate from 10.5% to 10% w.e.f. 1-9- 1995. (Trade Circular No. ET-1194-03-ADM-11 Circular No. 17 of 1995 dated 16-9-1995).

10.  Determination of purchase price of a Motor Vehicle — clarification regarding Octroi (Ref. No. ET-1996 02/ADM-11 Circular No. 16T of 1996 dated 6-7-1996 - 43 STR 35).

11.  Maharashtra Tax on Entry of Motor Vehicles into Local Areas Act, 1987 (AC(E-21)/Enf/ET Circular No. 4T of 1997 dated 13-2-1997 - 43 STR 159).

12.  Change in the tax under the Maharashtra Tax on the Entry of Motor Vehicles into Local Areas Act, 1987 (No. ET-2000/ADM-12/Circular No. 9-T of 2000, dated 20-4-2000 - 47 STR 30).

13.  Amnesty Scheme under the Maharashtra Tax on Entry of Motor Vehicles into Local Areas Act, 1987 (No. ET-2000/1/ADM-12/Circular No. 16-T of 2000, dated 17-5-2000 - 47 STR 87).

14. (1) Charges to be included in purchase value; i.e., freight, insurance and transport Charges.

      (2) Mode of payment under Rule 4 of the Maharashtra Tax on Entry of Motor Vehicles into Local Areas Act, 1987 ET- 2000/1/ADM 12/Circular No. A-11 of 2000 dated 2-11-2000.

15. The purchase value of motor vehicle means the value of chassis and the bodies built thereon; i.e., the entire composite vehicle entering in the Maharashtra State. (No. ET-1093/14/Adm-12/B- Cir. No. 20T of 2001 dated 5-10-2001 - 48 STR 98).

16.  Amendments to Maharashtra Tax on Entry of Motor Vehicles into Local Areas Act, 1987 vide Maharashtra Tax Laws (Levy, Amendment and Validation) Act, 2006 (Ordinance No. VI of 2006 dt. 20-6-2006) (No. AMD-1006/1A/Adm-3-Cir. No. 23T of 2006 dt.11-9-2006 - 53 STR 182).

Important Judgments under Entry Tax Act

1.  M/s. Wamanrao Anandrao Surkar : S.A. No. 107 of 1992 decided on 15-10-1994 : Appellate Authority has no power to condone delay u/s 13(3) of the Motor Vehicle Tax Act. (Sec. 13(3) is substituted w.e.f. 8-6-1995 providing for condonation of delay).

2.  M/s. Kakaria Ravi : S.A. No. 633 of 1993 decided on 15-7-1995 : Amendment of accepting 25% of the tax for admitting the appeal is a procedural one and therefore applies to all pending appeals.

3.  M/s. Anand Borewell : S.A. No. 15 of 1994 decided on 20-1-1996 : Air Compressor mounted on chassis is not a motor vehicle.

4.  M/s. Popatlal Mohanlal Choradia vs. Union of India (WP No. 685/1985/1998) : Excavators are motor vehicles.

5.  M/s. Buse Abraham vs. State of Kerala (121 STC 614) (SC): Excavators and Road Rollers are motor vehicles.

6.  M/s. Tata Power Company Ltd. vs. State of Maharashtra (95 VST 147)(Bom.)

Place outside the State includes a foreign country and import of specified goods is liable to entry tax.

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