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Patna,(BiharTimes): Value Added Tax (VAT) revenues in Bihar has witnessed sharp increase in the recent years.
While it was around Rs 2,200 crore in 2005-06, it went up to Rs 5,532.97 crore in 2009-10. The target in 2010-11 was Rs 7,124 crore. However, the receipts fell a little short at Rs 6,685 crore.
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Experts attribute this rise to the simplification and rationalization of VAT.
According to Bihar Chamber of Commerce (BCC) president O P Sah the initiative for the simplification and rationalization of VAT was taken at the highest level. Within weeks of taking over for the first time in 2005, chief minister Nitish Kumar and deputy chief minister Sushil Kumar Modi held a VAT Panchayat on the BCC premises in December 2005. A decision was taken to remove the anomalies and lacunae in VAT laws which were implemented in the state from April 1, 2005 under the President’s rule. It was decided that VAT laws be amended taking West Bengal's as the basis.
He said that following easing of tax rates over time, effective tax rate came down. Unaccounted trade through imports from neighbouring states ceased to be profitable, and as a result, tax leakage came down. Despite concessions, tax revenues went up.
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