Get Ready to Pay Higher Taxes on Flats, Vehicles in Bihar

A tall building at the southern end of Exhibition Road in Patna (file photo).

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Patna: With taxation, fines, and penalties being the main source of revenue in a state lacking large manufacturing houses or service industries, the state government on Tuesday passed the Bihar VAT (Amendment) Bill 2016 by a majority vote of 151-51 raising the tax from five percent to six percent.

The new amendments now includes builders and developers in the commercial tax gamut so those buying flats or other real estate in Bihar would be paying an additional one to five percent tax as determined by the Commercial Tax department.

The tax would be levied on the difference between the cost of flat and the value of the land, Commercial Tax Minister Bijendra Prasad Yadav said.

In a rare case of honesty, Yadav admitted that the state was short on fund due to revenue loss caused by the introduction of prohibition in Bihar hence the need for new taxes on several items. He further said that it was necessary to raise taxes in order to implement salary hike as recommended in the 7th Wage Commission report.

The minister, however, was quick to add that the new tax would have no impact on poor people and would only affect the affluent class.

The state government also passed the Bihar Motor Vehicles Taxation (Amendment) Bill, 2016 raising tax on purchase of vehicles and various licenses as proposed by Transport Minister Chandrika Rai.

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