Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: cpt :: VAT RATES :: ACCOUNTING STANDARDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: form 3cd :: ARTICLES ON INPUT TAX CREDIT IN VAT :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARD :: articles on VAT and GST in India :: empanelment :: VAT Audit :: TAX RATES - GOODS TAXABLE @ 4% :: due date for vat payment :: TDS :: list of goods taxed at 4%
Sales Tax »
 Amendment to Additional Sales Tax Act unconstitutional: High Court
 Maharashtra will soon achieve Rs one lakh cr sales tax : CM Devendra Fadnavis
 CBEC chief bats for minimal exemptions for India Inc under GST
 Issuance of Free Sale & Commerce Certificate to Merchant Exporters
 Why model GST law does not give confidence to exporting community
 State governments tighten their grip on sales tax holidays
 Income tax dept charts plan to broaden national taxpayer base
 Sale of shares on which STT is payable is exempt from tax
  Sale of Government of India Treasury Bills by Auction
 New tax treatment of sale of unlisted shares brings more certainty, less litigation
 Simpler tax laws, low rate can help get more people to pay up

Centre-state faceoff on central sales tax payout may put goods and services tax off track
March, 21st 2012

The sticky issue of compensation to the states for the reduction in the central sales tax is widening the gulf between the Centre and states, threatening to derail the United Progressive Alliance government's most ambitious indirect taxes reform - the goods and services tax (GST).

Hardening its stance further on the issue of compensation, the Centre has said it could not go on compensating states even if they were unwilling to support the GST.

"The government can't go on compensating states even if they don't come on board for GST," Finance Secretary R S Gujral said at aFICCI post-budget conference. States are already miffed with the insignificant Rs 300 crore provided as compensation for CST in the budget 2012-13 as against an overall demand of overRs 19,000 crore.

"It seems GST has gone in limbo... the Centre is not serious about implementing GST," Sushil Modi, Bihar deputy chief minister and chairman of the empowered committee of state finance ministers had said after Union budget.

But, the war of words had begun ahead of the budget after a letter from Gujral to Modi made it clear that no more compensation was coming. States responded by demanding restoration of CST rate to 4%.

"Due to financial constraints, if the Government of India in not in position to continue to pay CST compensation to the States, then CST rate may kindly be restored to 4% from April 1, 2012," Modi had said in a letter to Finance Minister Pranab Mukherjee.

The empowered panel of state FMs will now meet in April to firm up future course of action. "I am afraid that this unilateral decision of the government,without even giving an opportunity to the states to put forward their point of view, is likely to adversely affect the process of tax reform in the country, including the introduction of GST," Modi had said in his letter.

The Centre and states had agreed to reduce the central sales tax, levied on inter-state goods sales, by 1% every year beginning 2007 and eliminate it by April 2010 when the unified GST was to be rolled-out. But the reduction in CST had to be stalled after 2009 because of the delay in implementing GST.

The compensation included allowing states to tax some services, removal of additional excise duty on tobacco products and textiles, value-added tax on imports, budgetary support and increase in floor rate of VAT. While some elements of the package were implemented, others were not implemented as negotiations on GST floundered.

The Centre has already removed additional excise duty from tobacco and transferred revenues from 33 existing services to states. However, it is yet to bring the 44 new services under tax net or impose VAT on imports.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Achievements

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions