Commercial Taxes Commissioner B A Harish Gowda said the one per cent slash in the CST had resulted in a loss of Rs 1,000 crore, which will be compensated by the Centre.
In the budget proposals 2007-08, the commercial taxes department was set a target of Rs 17,000 crore. However, subsequently, the Centre reduced the CST from four to three per cent. “This in effect reduces the target to Rs 16,000 crore after taking into consideration the losses,” explained Mr Gowda.
The CST Act is a Central Act and was incorporated in 1956 to regulate inter-state trade. CST is levied by the central government, but the proceeds are passed on to state governments.
Gowda said there has not been any decline in collections. “In fact, even the revised estimate set at Rs 16,500 crore is Rs 500 crore above the revised target,” he said. The department has taken measures to ensure strict tax compliance and to plug loopholes, he added.
For the financial year 2008-09, the department has been given a target of Rs 19,344 crore, which represents a growth of 17.42 per cent over the revised estimates of 2007-08.