New Delhi, Dec. 16: Value added tax (VAT) will be rolled out in six more states beginning April next year with Uttar Pradesh and the five BJP-ruled states ? Gujarat, Rajasthan, Madhya Pradesh, Chhattisgarh and Jharkhand ? agreeing to move over to the new regime.

“It is good to know that the BJP-run states have taken an in-principle decision to implement VAT in their respective states. The exact date from when the new tax regime will be implemented is being discussed,” Bengal finance minister and head of the empowered committee on VAT Asim Dasgupta said.

The state governments have also agreed to reduce the central sales tax (CST) from 4 per cent to 2 per cent from April next year but demanded full compensation for the resultant revenue loss. The states are expected to suffer a loss of Rs 9,000 crore in revenue as result of the reduction in CST, the proceeds of which are divided among the states and the centre on a 79:21 ratio.

“The unified view is that the CST will be reduced from 4 to 2 per cent from April subject to full compensation to states for the revenue loss, which would be Rs 9,000 crore next fiscal,” said Dasgupta. The empowered committee of state finance ministers on VAT also sought greater powers for collection and appropriation of service tax.

The five BJP-ruled states are expected to move over to the VAT regime from April. Uttar Pradesh is also expected to migrate to the new regime soon. It is finalising the legislation. Tamil Nadu is the only state yet to decide on VAT.

After arguing against the new tax regime for almost nine months, the BJP granted in-principle permission to the party-ruled states to introduce VAT from next year. However, the implementation of the tax in these states will depend largely on the phasing out of the central sales tax and the compensation package.