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: VAT Audit :: ARTICLES ON INPUT TAX CREDIT IN VAT :: articles on VAT and GST in India :: empanelment :: ACCOUNTING STANDARDS :: cpt :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: VAT RATES :: TDS :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARD :: form 3cd :: TAX RATES - GOODS TAXABLE @ 4% :: due date for vat payment :: list of goods taxed at 4%
 
 
« Sales Tax »
 Sales tax staff protest against goods service tax council
 Income tax survey on city jeweller
 Service tax levy to weigh on upstream companies’ earnings
 5 pc tax on online sales awaits Cabinet approval
 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

FM may clear sales tax compensation if states support GST
September, 25th 2012

Finance Minister P Chidambaram is likely to drive a hard bargain while deciding on central sales tax (CST) compensation to states. After the empowered committee of state finance ministers returns from its study tour of Canada and Japan this week, Chidambaram is likely to seek states support for the Goods & Services Tax (GST) in return for a CST compensation package from the Centre.

Finance ministry officials told Business Standard the Centre would provide the compensation to states only after an assurance that they would cooperate in rolling out GST. They added the Centre didnt have the fiscal space to provide thousands of crores of rupees as CST compensation; if it was willing to accommodate states demands, they should reciprocate.

A meeting of the empowered committee may be convened soon. The finance minister would meet state finance ministers to iron out issues related to GST and CST compensation. He is yet to take a final view on CST compensation, said a finance ministry official, on condition of anonymity.
CST is a tax on inter-state movement of goods imposed by the Centre, but collected by states. Earlier, states were asked to gradually phase out CST to enable the introduction of GST in 2010-11. The Cabinet had approved a formula to compensate states for losses resulting from a cut in the CST rate, till 2009-10. As the GST roll-out was delayed, states demanded the Centre provide compensation for a longer period 2009-10.

Though the Centre had allocated only Rs 300 crore towards CST compensation in Budget 2012-13, states have pegged the losses for 2010-11 at Rs 19,000 crore. Before quitting as finance minister, President Pranab Mukherjee had cleared a compensation package to states, after states threatened holding back the money could jeopardise the GST rollout. The issue was then referred to Prime Minister Manmohan Singh, who was in charge of the finance portfolio for a short period after Mukherjees departure from North block. It is understood the Prime Ministers Office (PMO) had questioned the move, citing the countrys rising fiscal deficit, which is already expected to overshoot the Budget Estimate.

Though the finance ministry may approve the CST compensation, the funds may not be released before Budget 2013-14. Also, states support for GST may only help the Centre secure parliamentary approval for the required Constitutional Amendment Bill by the end of this year. Currently, the matter is being examined by a parliamentary panel.

After the Constitutional Amendment Bill is cleared by a two-thirds majority in Parliament and vetted by half the states, the GST legislation would have to be cleared by Parliament and the legislative assemblies of each state, officials said.

Recently, Chidambaram had said he was hopeful an agreement with the empowered committee of state finance ministers would be reached soon. I had one meeting with (empowered committee chairman) Sushil Modi. I have sought another meeting with him, as well as the full committee. If we can complete the exercise by October 15, there is no reason to assume there wouldnt be an agreement, he had said.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Desktop Application Development Outsourcing Desktop Application Development Offshore Desk

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