Jharkhand traders have reason to cheer with the state government deciding not to punish them for violating the Value Added Tax (VAT) rules for a year during which they will be educated on the new tax regime.

State Finance Minister Raghubar Das said: "The VAT will come into effect from April 1. There is lots of confusion in the minds of traders. Considering the low level of awareness among traders, the state government has decided not to punish the traders for one year."

"The traders will be educated over one year about VAT and its rules. Tax officials will go to rural areas and make traders aware about VAT," Das told.

"We have recommended that items needed for puja offerings be kept free from tax, and also to keep rice, wheat, pulses and food free from taxes for people living below the poverty line."

The Bharatiya Janata Party (BJP)-ruled state had not implemented VAT. In a recent meeting of BJP chief ministers, the issue was raised with central party leaders who gave the go ahead to implement it from April 1.

Jharkhand had been arguing in favour of implementing VAT.