A proposal to increase VAT charges on consumable items and luxury items in Bihar has been approved by Chief Minister Nitish Kumar. The cabinet has approved the tax which will be charged at 13.5 percent on all sweets and savoury items. The move to increase the tax comes in anticipation of the liquor ban which will be imposed in Bihar from April 1.
Briefing about the decision, Principal Secretary, Brajesh Mehrotra noted that a 13.5 percent VAT will be charged on sweets priced at more than Rs. 500 per kg and salty savoury items like samosas, kachoris, and branded salt products. Packaged food with flour, maida and besan will also be charged an additional VAT. An additional 5% VAT will also be charged on dry fruits.
The increase in VAT comes directly before the planned liquor ban in the state starting from April 1. The first phase will prohibit the sale of any alcohol made in India with the second phase targeting Indian Made Foreign liquor products in the following six months. The added tax will provide the government with additional revenue to make up for the loss in liquor sales.