New Delhi, March 24: The government today said 21 of the 29 states and all Union territories would introduce value-added tax (VAT) on April 1 as planned, though five BJP-ruled states and Uttar Pradesh and Tamil Nadu have decided to stay out.

VAT?s launch, aimed at creating a national market with uniform taxes, was put in doubt after the main Opposition BJP last weekend said five states ruled by it would not implement it, though when in power at the Centre the party did much of the groundwork.

Bengal finance minister Asim Dasgupta, who heads the committee of finance ministers on VAT, said: ?I held a meeting with BJP leader L.K. Advani and former finance minister Yashwant Sinha, with whom I had initially worked to bring in VAT... we were together then... we will still try to talk them back into the loop.?

Dasgupta would also meet Uttar Pradesh chief minister Mulayam Singh Yadav on Monday.

?Most state finance ministers are strongly committed to launching VAT from April 1. At least 21 states are ready. I urge other states not to miss the historic opportunity,? finance minister P. Chidambaram said after a meeting of the committee.

Besides the seven states where the UPA or its allies are not in power, Congress-ruled Uttaranchal is not ready to join the VAT regime as it has not enacted the necessary law.

Levied on the value manufacturers and retailers add to goods at each point of sale in the chain of transactions, VAT will replace the complex web of sales tax which often results in double taxation, other than creating distortion in rates across states.

Dasgupta said the committee decided that states would have the right to waive VAT for traders with a turnover up to Rs 10 lakh, double the earlier cut-off.

States offering the relief will not receive any additional compensation from the Centre, other than what is being given as part of the introduction of the levy.

He added that traders earning between Rs 10 lakh and 50 lakh, who were earlier to be taxed at 1 per cent of their turnover, would now be taxed at 0.25 per cent. This flat rate has been fixed for these traders as they would not be paying VAT on goods they sold.

Analysts see these twin moves as designed to break the agitation traders? lobbies are launching against VAT.