Side-effects of booze ban: VAT up 13.5% on ‘luxury items’ in Bihar

Patna: In an apparent attempt to minimise the impending revenue loss due to the ban on country and spiced liquor from
April 1, the Bihar government on Tuesday increased VAT up to 13.5% on 12 items, including sari, cosmetics, fabric, auto parts, dry fruits, electrical goods, sweetmeats and sand with immediate effect. The increase, approved by the state cabinet at its meeting on Tuesday, will come into effect once the government issues a notification in this regard.
Briefing reporters after the meeting, principal secretary (cabinet secretariat) Brajesh Mehrotra described the affected items as “luxury items, mainly used by VIPs”. He said 5% VAT would be payable on the purchase of every sari costing more than Rs 2,000. There was hitherto no tax on it. Similarly, 5% VAT has been introduced on the purchase of fabrics priced Rs 500/meter and above.
Sweetmeat lovers will now have to pay 13.5% VAT on the purchase of items costing Rs 500/kg and more. Similar 13.5% VAT has been introduced on branded packaged items like flour, maida, sujji, besan, namkeen, samosa, nimki, kachauri, bhujia, chanachoor, dalmoth, potato chips and salted peanuts.
The VAT on the purchase of dry fruits has been upped from 5% to 13.5%. Likewise, the VAT has been increased from 5% to 13.5% on the purchase of battery and auto parts, industrial cable, transformers, industrial inputs and electric equipment.
The construction sector will also be hit as the tax on the purchase of sand has been upped from 5% to 13.5%. The VAT on cosmetic items, including perfumes, hair oil etc, has also been increased from 5% to 13.5%.
Even lower middle class people were not spared. The government would levy 13.5% tax on the purchase of mosquito repellent.
Meanwhile, the cabinet renamed the existing College of Commerce of Magadh University as ‘College of Commerce, Arts and Science’. It sanctioned a sum of Rs 50 crore to IGIMS-Patna as its establishment cost for the year 2015-16.
The cabinet also OK’d a proposal of the home department to revise the wages of jail inmates. Those who are skilled will now get a daily wage of Rs 156 while the semi-skilled will get Rs 112. The unskilled will get Rs 103. This wage would be in addition to the daily food allowance of Rs 91.
The government has also decided to do away with the existing budget manual which was implemented way back on October 1, 1953. The cabinet OK’d a proposal to implement the new state budget manual 2016.