In a bid to curb the loss of revenue likely to be caused by the proposed ban on the sale of liquor from the next financial year in Bihar, the Nitish Kumar government has decided to impose hefty tax on several items, including eatables such as sweets, samosas and kachouris.
The state Cabinet on Tuesday approved the proposals to impose 13.5 per cent Value Added Tax (VAT) on luxury items such as sweets costing more than Rs 500 per kg.
Similar tax was also imposed on branded packaged items such as flour, refined flour, worth suji, besan, namkeen, salted peanuts, bhujiya, potato chips, chanachur, besides mosquito repellents and foam sheets. Most of these items were either exempt or had five to six per cent taxes.
The VAT on items such as UPS, invertors, dry fruits, auto spare parts, battery parts, cosmetics, perfumes, toiletries, hair oil and sand had also been raised from 5 per cent to 13 per cent. Besides, five per cent VAT has been imposed on cloth worth more than Rs 500-a-metre, sarees priced at more than Rs 2,000, packaged samosa, namkeen and kachoris. All these items were exempt from VAT earlier.
In another decision, the government decided to give tax exemption to Bollywood movie, Chalk N Duster starring Shabana Azmi and Juhi Chawla in main roles.
The decision to impose or increase taxes evoked sharp reaction from the Opposition. Senior BJP leader Sushil Kumar Modi said the government had promoted “inspector raj” in the state with its decision to impose taxes on essential goods such as sweets and clothes. “The increased VAT on sand will deal a blow to the construction industry,” he said. The former deputy chief minister said small traders would be forced to run around the commercial taxes department to pay their taxes.