Press Esc to close
Friday 31 October 2014
News updated at 12:19 PM IST
Weather
Max: 28.4°C
Min : 18°C
In Bangalore
Partially cloudy

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
Security personnel patrol a street after a protest by the supporters of Jammu and Kashmir...

Security personnel patrol a street after a protest by the supporters of Jammu and Kashmir...

India A players Rohit Sharma and Manish Pandey during a practice match against Sri Lanka...

India A players Rohit Sharma and Manish Pandey during a practice match against Sri Lanka...

Indian Air Force officers arrive at the Gateway of India after swimming for a distance...

Indian Air Force officers arrive at the Gateway of India after swimming for a distance...

The Navy hovercraft carrying West Bengal Chief Minister Mamata Banerjee to Sagar Island...

The Navy hovercraft carrying West Bengal Chief Minister Mamata Banerjee to Sagar Island...

A Rajasthani herder with his cows in Gurgaon...

A Rajasthani herder with his cows in Gurgaon...

Devotees wait for the Sun to offer prayers, during Chhath Puja festival in Agra...

Devotees wait for the Sun to offer prayers, during Chhath Puja festival in Agra...

Sand artist Sudarsan Pattnaik creates a sand sculpture on Black Money with a message...

Sand artist Sudarsan Pattnaik creates a sand sculpture on Black Money with a message...

BJP workers arrange the cut-outs of party symbol (lotus) to decorate the boats at the Marine...

BJP workers arrange the cut-outs of party symbol (lotus) to decorate the boats at the Marine...

A police man investigates the tunnel dug up by the robbers in Gohana bank heist, in Sonipat...

A police man investigates the tunnel dug up by the robbers in Gohana bank heist, in Sonipat...

Bollywood megastar Amitabh Bachchan sweeps in a stree during a cleanliness drive as a part...

Bollywood megastar Amitabh Bachchan sweeps in a stree during a cleanliness drive as a part...

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