When Indian auto industry is witnessing biggest fall in its sales in 11 years, Bihar is witnessing steep increase in car sales. Sources said that the state registered 12% increase in the sale of SUVs, MUVs and other vehicles till September this fiscal year.
Nitish Kumar's government did the trick when it formed the government in 2005. Efforts were made to to simplify and rationalize value-added tax (VAT) in the state by doing away with all the loopholes in VAT laws. The government amended the VAT laws and eased tax rates. This move discouraged unaccounted traders from importing things from other neighboring states.
As expected, transparent VAT laws and modest tax rates helped the state earn more revenues. Sources from Bihar Chamber of Commerce stated that VAT revenue for the year 2010-11 was Rs. 6,685 crore, running a little short of its target of Rs. 7,124 crore.