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State opposes empowered committee's move on CST loss
April, 23rd 2012

Odisha has taken exception to the move of the empowered committee of state finance ministers on GST (Goods & Service Tax) to form a committee for revisiting the Centre's decision to phase out compensation against CST (Central sales tax) loss incurred by state governments.

"The state finance minister has raised a loud protest against the move at the recent meeting of the empowered committee. Our stand is that when decisions are taken at the level of the Union finance ministry, it is futile to form one committee after the other, said a senior finance department official.

The empowered committee of state finance ministers has decided to form a committee consisting of finance secretaries and commissioner of commercial taxes of all states. This follows the assurance of Union finance minister Pranab Mukherjee to the empowered committee chairman and Bihar deputy Chief Minister Sushil Kumar Modi that the Centre would review its decision to phase out compensation given to states in lieu of CST loss.
The Centres move to pull a plug on CST compensation had sparked considerable resentment among all states.

With the fate of the much touted Goods & Service Tax (GST) still hanging in the balance, the Odisha government has demanded that CST rate may be reverted to the original four per cent instead of the current rate of two per cent so that states do not lose out on revenue substantially.

 
 
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