Press Esc to close
Sunday 23 November 2014
News updated at 2:05 PM IST
Weather
Max: 0°C
Min : 0°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
Elderly women take part in Tug-of War during annual month long sports competition...

Elderly women take part in Tug-of War during annual month long sports competition...

A tigress in a playfull mood at the Maharajbag Zoo in Nagpur, Maharashtra...

A tigress in a playfull mood at the Maharajbag Zoo in Nagpur, Maharashtra...

Indian Air Force (IAF) Sukhoi Su-30 fighter aircrafts make a formation in the shape...

Indian Air Force (IAF) Sukhoi Su-30 fighter aircrafts make a formation in the shape...

Players during the 3rd day of IBSF World Snooker Championship in Bengaluru...

Players during the 3rd day of IBSF World Snooker Championship in Bengaluru...

Interim President, BCCI Shivlal Yadav felicitates Indian cricketer Rohit Sharma at the BCCI...

Interim President, BCCI Shivlal Yadav felicitates Indian cricketer Rohit Sharma at the BCCI...

Migratory birds arrive to make nest at tree at Islampur in Birbhum district of West Bengal...

Migratory birds arrive to make nest at tree at Islampur in Birbhum district of West Bengal...

Decommissioned warship, INS Vikrant being wrecked at Darukhana ship breaking yard in Mumbai...

Decommissioned warship, INS Vikrant being wrecked at Darukhana ship breaking yard in Mumbai...

Indian Air Force (IAF) helicopters make a formation during a parade for presentation...

Indian Air Force (IAF) helicopters make a formation during a parade for presentation...

Indian Coast Guard launching Interceptor Boat c-416 at Hazira, Surat...

Indian Coast Guard launching Interceptor Boat c-416 at Hazira, Surat...

Arun Jaitley with Mega actors Amitabh Bachchan and Rajinikanth...

Arun Jaitley with Mega actors Amitabh Bachchan and Rajinikanth...

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