"This (approval of promulgation) will help the Union territory generate additional gross revenue and net tax generation that is estimated at Rs 120 crore and Rs 7 crore per annum, respectively," an official statement said.
The decision was taken in the Cabinet meeting headed by Prime Minister Narendra Modi.
"This will substitute the clause (b) of sub-section (1) of section 4 of the Dadra and Nagar Haveli Value Added Tax Regulation, 2005 with the amendment, namely (b) in respect of goods specified in the Third Schedule, at the rate of 5 per cent," it added.