The empowered committee will soon come up with a formal list of items and the tax rates, said Asim Dasgupta, the committee chairman and West Bengal finance minister.
States agreed on the 4.0 per cent VAT for 250 items including, agro products and manufacturing inputs, while 217 other items would attract 12.5 per cent tax.
About 41 items like petrol, diesel, ATF, agriculture equipment and newspapers would be exempt from VAT, while precious metals like gold and silver would attract only 1.0 per cent tax. Sugar, textile and tobacco items would be out of the VAT net at least in the first year.
"States are fully prepared for VAT from April 2005. We will convey the views of states to Union finance minister soon," Mr Dasgupta said.
The VAT panel, which met here to iron out the differences, is likely to discuss with Mr Chidambaram on Wednesday the issue of a compensation package for any revenue loss after the new tax regime comes into effect.
The panel is in the process of ironing out all the differences and finetuning the VAT legislations, which have to be passed by the respective state Assemblies.
The committee also gave a go-ahead to the proposed VAT information exchange system, which would record all inter-state transactions and check tax evasion.
Earlier in the week, Mr Dasgupta met the traders and assured them the committee would vet all the state legislations to ensure uniformity VAT laws. He also assured the traders that all local levies would be subsumed in the VAT. The traders demanded abolition of the Central Sales Tax (CST) before implementation of VAT regime.