Mumbai: The panel on value added tax will look into the issue of making common ground for VAT rate as the various states have deviated from agreed tax rates on goods, particularly fuel.

A meeting of the committee of secretaries/principal secretaries and commissioners of trade taxes today announced the setting up of separate committees for northern, eastern, western and southern states, to study deviations and report back in a month's time.

The four committees would study the nature and extend and hold meetings before submitting reports to the VAT panel, the sources said.

Some members have pointed out difficulties in strictly adhering to the agreed tax rates as the VAT panel does not have legal powers.

While the panel has fixed two main VAT rates - four per cent and 12.5 per cent - there are also certain minimum tax rates for some non-VAT commodities.

These rates, called uniform floor rates, are fixed at 20 per cent for diesel and petrol. However, many states are deviating from these rates.

The three neighbouring states of Delhi, Haryana and Punjab, meanwhile, have reduced their sales tax on diesel to less than 20 per cent.