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Odisha seeks Centre's nod to re-introduce Central Sales Tax

July, 22nd 2014
Odisha government today said it had sought permission from the Centre to re-introduce Central Sales Tax at the rate of 4 per cent as the state was denied the adequate compensation for reducing the CST to 2 per cent since 2008. "Odisha's Chief Minister has drawn attention of Prime Minister and Union Finance Minister regarding the pending compensation amount. If they do not pay the compensation, the Centre should allow the state to reitroduce CST at 4 per cent," state's Finance Minister Pradip Kumar Amat said while replying a question in the Assembly here. Stating that the rate of CST was first reduced to 3 per cent from 4 per cent on April, 1, 2007, the finance minister said that the state was again told to further reduce the CST rate to 2 per cent on May 1, 2008. In the process, Amat said while the state was expecting a compensation of Rs 3,843.03 crore as compensation from the 2007-08 to 2012-13 fiscal, it got only Rs 1,303.08 crore. "We have demanded payment of rest compensation amount of Rs 2,539.95 crore," he said. However, the finance minister said Centre was yet to respond to the state'e request. Replying a question by BJD member Prafulla Samal, the finance minister said the state is facing difficulties in implementing different schemes and often fund from its own resources as the Centre does not give matching share at proper time. Citing an instance, the finance minister said while the state government earmarked Rs 1,088.62 crore under Accelerated Irrigation Benefit Programme (AIBP) in 2012-13, it could get only Rs 38 crore from the Centre. Similarly, the centre gave only Rs 15.23 crore against the state's AIBP budget of Rs 967.57 crore, Amat said. He said the state was also not getting its dues under centrally sponsored schemes. For instance, Amat pointed out that while the Centre's share under MGNREGA for the year 2013-14 was Rs 1363.50 crore, it sanctioned only Rs 757.52 crore in the previous fiscal. Odisha's finance minister said that the state would again request the Centre to release funds under central schemes, centrally sponsored scheme and other schemes.