COMPENSATION FOR CST CUT: STATES NOT FOR VAT RATE HIKE

State Government has opposed the finance ministry’s proposal to raise the Value-Added Tax (VAT) rate on a number of items from 4 per cent to 5 per cent. The move was suggested to compensate states for losses due to reduction in the Central Sales Tax (CST) rate by one percentage point from April this year. States also declined to levy VAT on textiles.