Haryana has agreed to revise its value added tax (VAT) rate for tyres from Saturday by raising it to 12.5 percent in parity with the rates prevalent in the capital from April

"The Haryana notification will bring the VAT rate on automotive tyres and tubes to 12.5 percent as against the present rate of 8.0 percent in the state," said All India Tyre Dealers' Federation (AITDF) convenor S.P. Singh Tuesday.

Haryana's assurance came during a meet Monday at the Delhi government's request on the behalf of AITDF, which has been seeking parity in duty structures across the country.

In the five weeks since Delhi imposed 12.5 percent VAT, "there has been a wholesale shift in the tyre business to Haryana for truck, bus and taxi tyres - constituting over 70 percent of the sales volume in the capital," said Singh.

The difference of around Rs.900 in the cost of a pair of truck tyres made it worthwhile to cross over the border to Haryana to make the purchase and save on taxes. The price difference will remain till May 14.

However, Chandigarh is yet to agree to revise its rate from 8.0 percent, Singh added.