The decision, taken at a state cabinet meeting here, will benefit farmers, an official said, after the meeting, chaired by Chief Minister Prithviraj Chavan.
The meeting decided to extend the VAT concession for the dry fruit till May 31, 2013. It was earlier applicable till May 31, 2012.
The decision would impose a burden of Rs 25 crore on the state exchequer.
Farmers' organisations in Maharashtra have been demanding VAT exemption, saying raisin processing is done by farmers themselves and not by any agro processing industry.