Nagaland reduced sales tax on motor vehicles from 12 to four per cent in view of non-compliance of the uniform floor rate on sales tax by the North-Eastern States.

In a statement financial commissioner Lalthara said the State Government had amended the Nagaland Sales Tax and had fully complied with the uniform rate in conformity with the decision taken by the conference of finance ministers with effect from January 1 last.

But in view of non-compliance by neighbouring states, Nagaland had to roll back the sales tax from the uniform floor rate of 12 per cent to the form rate of four per cent.

At present the rate of taxation in neighbouring states are : Assam and Tripura (4 per cent), Meghalaya (3 per cent), Mizoram and Arunachal Pradesh (zero per cent). Consequently, the Nagaland Government had to revert to four per cent tax so as to prevent complete diversion of trade on motor vehicles to the neighbouring states, he added.