Bihar Legislative Council today passed six legislations including the Bihar Value Added Tax (VAT) (Amendment) Bill, 2016 which seeks to propose an increase of .50 per cent to one per cent to the existing VAT rate. The Bill proposed to mop up an additional Rs 1,200 crore in the current fiscal.

The Bihar VAT (Amendment) Bill, 2016 proposes to increase one per cent of VAT rate from five per cent on various goods, while there would be a .50 per cent increase of goods not covered under the Bihar VAT Act, 2005 at 15 per cent from 14.5 per cent earlier. Defending the tax hike proposal, Commercial Taxes minister Bijendra Prasad Yadav said the hike would not affect the common people as items consumed and utilised by them have been left untouched.

Stating that the government may be able to mop up Rs 1,200 crore from the hike, Yadav said the government needs money to fund its various scheme of the ambitious ‘Seven Resolves’ and hence a very little hike has been proposed. Refuting Leader of Opposition Sushil Kumar Modi’s claim that there was a shortfall of 35 per cent in revenue collection in the first quarter of the current fiscal, the minister said it was not unusual as it has been witnessed that both revenue collection and expenditure were low in the first quarter.

It has been witnessed that tax collections do not increase with the increase in tax rate, Sushil said adding there was an increase of 20 per cent every year in revenue collection when the NDA was in power and when it reduced taxes on more than 150 goods and items. The Legislative Council also passed the Bihar State University (Amendment) Bill, 2016 proposing to set up two universities, one each at Patna and Purnea, by carving out some colleges from Magadh University, Bodh Gaya and B N Mandal University at Madhepura.