« Top Headlines » Open DEMAT Account in 24 hrs  Old or new tax regime for TDS on salary? This post-election 2024 event will impact your tax planning  What Are 5 Heads Of Income Tax?  Income Tax Dept releases interim action plan for FY25 on tax collection, refund approvals   Income Tax Return: 5 lesser-known tax-saving tips from Section 80  Income Tax Return: 5 lesser-known tax-saving tips from Section 80  Why you need not rush to file your ITR immediately  Income tax returns: ITR-1, ITR-2, ITR-4 forms for FY 2023-24 available for e-filing  Section 80DDB tax benefits for specified illnesses: 5 things to know  Income tax slabs FY 2024-25: Five tips to help taxpayers decide between old and new income tax regimes  ITR-1, ITR-2, ITR-4 forms for FY 2023-24 (AY 2024-25) available now on e-filing income tax portal  How To Save Tax For Salary Above 15 Lakhs? «  Sometimes, a comma can cut you both ways... Retail investors turn to FMPs... » Meet on VAT compensation package soon August, 25th 2006 Keen to sort out difference of opinion The Centre and the States appear to have come a step closer towards agreeing on a compensation package for the proposed phaseout of Central sales tax (CST) beginning October 1 even as differences persist on the components of the package. "Within the next seven days, the officials from the Centre including Dr Parthasarathi Shome, Advisor to the Finance Minister and the Empowered Committee officials would try to work out a solution. We are trying hard on both sides to converge on an agreed compensation package," Dr Asim Dasgupta, Chairman of the Empowered Committee of State Finance Ministers on VAT, told presspersons after meeting the Union Finance Minister, Mr P. Chidambaram, today. Package The VAT panel met here earlier in the day to discuss CST compensation package. Both Dr Dasgupta and Mr Chidambaram are likely to meet after a week on the issue of CST compensation package. "We need to have another meeting," Mr Chidambaram said when asked about the outcome of his meeting with the VAT panel chairman on Thursday. Dr Dasgupta admitted that there was "some difference of opinion" between the Centre and the States on the elements of the compensation package. He, however, expressed optimism that the differences could be ironed out well ahead of the proposed October 1 date for CST reduction. CST Collections Asked whether there was any estimate of losses that States would incur on account of proposed CST phaseout roadmap, the VAT panel chairman said that it was estimated that States would lose about Rs 2,500 crore in the six months beginning October 1 this fiscal. "For the next fiscal, we expect the loss to be about Rs 12,000 crore for the entire year," Dr Dasgupta said. Annual CST collections during 2005-06 stood at Rs 18,000 crore, growing at about 18 per cent every year. Dr Shome said that the Centre was keen to continue with VAT reforms, of which CST reduction was an integral part. Informed sources, however, said that the States continued to stick to their earlier position of wanting a higher devolution of service tax collections of the Centre (50 per cent) apart from budgetary support as part of the compensation package. The States are also understood to have taken a position that the Centre's suggestion to hike VAT rates from 4 to 5 per cent and then to 6 per cent in the next two years should not be counted towards the CST compensation package as States are already empowered to hike VAT rates under the aegis of the VAT panel.