Patna, Dec. 13: Bracing itself for the cash crunch arising from prohibition, the state government today decided to increase road tax on luxury vehicles from seven to 12 per cent. The decision was taken in the cabinet meeting held today.

It also decided to change the name of "registration, excise and prohibition department" to "prohibition, excise and registration department" to show the government's seriousness about total ban on liquor, imposed in the state since April 5.

Briefing reporters on the meeting chaired by chief minister Nitish Kumar, cabinet secretariat department principal secretary Brajesh Mehrotra said altogether 20 agendas were discussed and approved. "The cabinet agreed to a transport department proposal to amend the Bihar Motor Vehicle Taxation Act, 1994, and increase one-time road tax from seven to 12 per cent on automobiles costing over Rs 8 lakh," Brajesh said.

The tax will be imposed on the price of the vehicle excluding Value Added Tax. If a vehicle's price, excluding VAT, is Rs 10 lakh, buyers will now have to pay a one-time road tax of Rs 1.2 lakh instead of Rs 70,000 earlier.

Transport department officials said increase in revenue will depend on number of luxury vehicles sold, but added 5.5 lakh four-wheelers were sold in the state in 2015.

The state cabinet also decided to celebrate the nirvana or liberation (death anniversary) of Lord Mahavira at Pawapuri in Nalanda as a state function every year. Mahavira is the 24th and last tirthankara of the Jains and is said to have attained liberation around 527 BC.