Patna,(BiharTimes): The state cabinet on Tuesday approved the proposal of the commercial taxes department to increase VAT on 12 items. They include cosmetics, expensive saris, fabric, auto parts, dry fruits, electrical goods, sweets and sand with immediate effect. 

According to principal secretary cabinet secretariat department Brajesh Mehrotra the hike would be between five and 13.5%. 

He said that there would be five per cent VAT on saari exceeding Rs 2,000 each. Till now there was no tax on it. 

Customers will have to pay five per cent extra for buying fabric costing Rs 500 per metre or more.

There will be 13.5 per cent VAT on sweets priced more than Rs 500 per kg. 

Similarly additional 13.5% tax would be levied on branded packed items like flour, maida, sujji, besan, nimki, kachauri, namkeen, samosa, bhujia, chanachur, dalmote, potato chip, salted peanuts. Till now there was no taxes on these items. 

Mehrotra said that the existing five percent tax on the purchase of dry fruits would now be increased to 13.5%.

Additional tax of 13.5 percent would be levied as against existing 5% on auto parts, battery, industrial cable, transformers, industrial inputs, electric equipment. 

The manufacturing units will also be hit by the increase of 13.5% additional tax on the purchase of sand for any construction work as against the existing five per cent tax. 

Additional tax of 13.5% would be imposed in all the cosmetic items including perfumes, hair oil etc as against the existing 5%.

The government would levy 13.5 per cent additional tax on the purchase of mosquito repellent and (polyurethane) foam.

Political observers are of the view that the hike in VAT has been made to compensate the annual loss to the state exchequer of about Rs 4,000 crore following the decision of the Nitish Kumar government to impose ban on sale of liquor.