The Himachal Pradesh government today said it has reduced VAT to 4 per cent from 14.3 per cent earlier on sales of goods through CSD canteens on the request of Army authorities.

"The recommendations in this regard were received from Army and other allied organisations such as Sarvatar Canteen, Sarkaghat Canteen Stores Department, and Pathankot to reduce VAT to 4 per cent and the government accepted the recommendations," an official spokesman of Excise and Taxation Department said here.

Decision to impose four per cent VAT was taken in the Civil Military Liaison meeting which was held on May 21, 2013 under the Chairmanship of Chief Minister Vibhadra Singh, he said, adding that on the request of Army, the state government issued a notification on August 17, 2013 to impose four per cent VAT on CSD canteen.

He said that before this arrangement, CSD canteens were paying 14.3 per cent VAT and surcharge for buying various items from other states, especially Punjab.

After this decision, the CSD canteen would now have to pay four percent VAT to the Himachal government and two per cent CST to Punjab government, he said.

It would save 7.75 per cent on the items to be purchased from CSD canteen, he added.