The Centre will convene a meeting of the states within two weeks to finalise the revenue compensation package to neutralise any losses due to the introduction of the value-added tax (VAT).
The meeting follows the mandate given by the Cabinet last night to Finance Minister Jaswant Singh to negotiate the rate of compensation with the state governments.
Government officials, however, said they did not anticipate any revenue loss for states due to the switchover to VAT from April 1.
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The officials said while the states had to align their revenue neutral rates post-VAT in the band of 10-12.5 per cent, they would not suffer any revenue losses.
The expansion in the tax base and volume due to the switchover to VAT should neutralise the impact of having a lower revenue neutral rate, they said.
However, the officials said the Cabinet