In view of the persistent demand from farmers, the Maharashtra Government has decided to extend the Value Added Tax exemption on raisins by another year.

The State Cabinet on Wednesday took the decision to give the VAT concession for the dry fruit till May 31, 2013. The State treasury is likely to take a hit of about Rs 25 crore due to the decision.

In 2010, the State Government for the first time had granted the exemption for two years.

A senior Maharashtra Government official said over the last several years, farmers' organisations in Maharashtra have been demanding VAT exemption.

The organisations sought the exemption because raisin processing is done by farmers themselves and not by any agro processing industry, the official said.