Voicing opposition to the state government's proposal to increase Value Added Tax by 1%, Bihar Chamber of Commerce (BCC) today demanded that the move be kept in abeyance as the hike may result in revenue loss and impact business and trade.
    
"The proposal to hike VAT to 5% from 4% will have negative impact on trade and business of the state and lead to loss of revenue," BCC chief PK Agrawal said in a
press release.
    
The proposed increase in VAT would make the commodities costlier in comparison to neighbouring states and may result in growth of unscrupulous trade in the state.
    
Besides, the state government would lose its principal VAT revenue due to loss in the sale of commodities, he said.
    
He hoped that as per assurances given to the business community by the state government at the time of implementation of VAT in April 2005 that it would follow West Bengal's rule, rates vis-a-vis implementation of VAT would be upheld.
   
Deputy chief minister SK Modi had on October 15 said the state government was seriously considering to increase the rate of VAT by one per cent to meet its rising expenditure.