Press Esc to close
Tuesday 21 April 2015
News updated at 3:07 AM IST
Weather
Max: 33.4°C
Min : 21.6°C
In Bengaluru
Sunny day

Govt to release Rs 9,000 cr to states in CST compensation

New Delhi, Feb 28, 2013 (PTI)

The government today said it will release Rs 9,000 crore as the first instalment of compensation for losses incurred by states due to reduction in the Central Sales Tax rate, a precondition for the rollout of GST - the indirect taxes regime.

It also expressed the hope that a consensus with states on the Goods and Services Tax, which has been in the works for long, will be reached within a few months.

"I propose to take the first decisive step by setting apart, in budget, a sum of Rs 9,000 crore towards the first instalment of balance of CST compensation," Finance Minister P Chidambaram said, presenting the Budget 2013-14 in Parliament.

Recently, the Centre and states resolved the contentious issue of CST compensation, with states agreeing to a lower payment of Rs 34,000 crore for phasing out CST, a precondition for rollout of the Goods and Services Tax.

The Centre will bear 100 per cent of the loss accrued to states in 2010-11 fiscal on account of lowering CST. However, for 2011-12 and 2012-13 financial years, the Centre will provide for 75 per cent and 50 per cent of the losses.

CST, a tax imposed on the inter-state movement of goods was reduced from 4 per cent to 3 per cent in 2007-08, and further to 2 per cent in 2008-09 after introduction of Value Added tax (VAT).

Recently in a meeting with Chidambaram, the state finance ministers agreed to prepare a model legislation and set up three committees to sort out various issues for smooth roll-out of GST.

"...I hope we can take this consensus forward in the next few months and bring this to this House a draft Bill on Constitutional amendment and draft Bill on GST," Chidambaram said in the Budget speech.

GST, which was to be introduced from April 2010, has missed several deadlines over differences between states and the Centre over contentious issues of CST compensation and the design for GST structure.


Go to Top

Photo Gallery
Minister U T Khader and MLA Vasanth Bangera stopping Minister B Ramanath Rai who got angry on ...

Minister U T Khader and MLA Vasanth Bangera stopping Minister B Ramanath Rai who got angry on ...

Yuvraj Singh of Delhi Daredevils plays a shot during their IPL match against Kolkata Knight Rider...

Yuvraj Singh of Delhi Daredevils plays a shot during their IPL match against Kolkata Knight Rider...

Police force at a large number being deployed for Left Front activists 'March to Lalbazar Kolkata...

Police force at a large number being deployed for Left Front activists 'March to Lalbazar Kolkata...

Kolkata Knight Riders players celebrate the wicket of J P Duminy (C) of Delhi Daredevils during ...

Kolkata Knight Riders players celebrate the wicket of J P Duminy (C) of Delhi Daredevils during ...

Traditional elephant fights, elephant races, tug of war and dances mark this festival which coincide

Traditional elephant fights, elephant races, tug of war and dances mark this festival which coincide

Villagers struggle to get drinking water from an almost dried well near Tansa dam, in Shahapur ...

Villagers struggle to get drinking water from an almost dried well near Tansa dam, in Shahapur ...

Prime Minister Narendra Modi at the foundation stone laying ceremony of Dr. Ambedkar International

Prime Minister Narendra Modi at the foundation stone laying ceremony of Dr. Ambedkar International

Narendra Modi talking with BJP veteran LK Advani during 'Garib Kalyan Yojana',...

Narendra Modi talking with BJP veteran LK Advani during 'Garib Kalyan Yojana',...

A view of the Kedarnath Shrine before it reopens on April 24 for general public...

A view of the Kedarnath Shrine before it reopens on April 24 for general public...

Snowed down surroundings of Kedarnath Shrine before it reopens on April 24 for general public...

Snowed down surroundings of Kedarnath Shrine before it reopens on April 24 for general public...

Copyright 2014, The Printers (Mysore) Private Ltd., 75, M.G Road, Post Box 5331, Bengaluru - 560001
Tel: +91 (80) 25880000 Fax No. +91 (80) 25880523