All the four states agreed to impose one per cent VAT or sales tax on the precious metals, which would provide a major relief to Delhi, which has been losing considerable amount of bullion trade to states where a lower tax regime prevailed.

Delhi had earlier this month decided to bring down VAT on bullion from one to 0.1 per cent, a slab that does not exist under the new tax regime.

Gujarat, Rajasthan and Uttar Pradesh have agreed to raise the tax rate on bullion to one per cent, while Delhi has also promised to bring it back to one per cent, Asim Dasgupta, chairman, empowered committee on VAT said after a two-hour meeting of the panel.

Though Delhi had decided to lower VAT rate on bullion, it has not notified its decision, state VAT commissioner R K Verma said.

"Gujarat had announced that it would increase tax on bullion to one per cent as soon as possible. After hearing that, Rajasthan representative said the state will also do the same if other adjacent states increase it to one per cent," Dasgupta said, adding Uttar Pradesh representative also agreed to raise tax on bullion to the same level.

He said Delhi Finance Minister A K Walia also assured to bring back VAT on bullion to one per cent if Rajasthan increases the sales tax on precious metals to the same level.

Though Dasgupta did not disclose the timeframe of implementing this decision, sources in different states said it would be done from March 1, this year.