Industry & Economy
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Taxation
`Chhattisgarh will lose Rs 400-cr revenue by scrapping CST'
K.R. Srivats
New Delhi
,
Dec. 14
ZERO-RATING of central sales tax (CST) may be a desirable objective in a State-level value added tax (VAT) regime, but primary-resource rich States like Chhattisgarh are worried about the revenue loss from any such move.
Chhattisgarh would stand to lose revenues of about Rs 400 crore if the CST gets zero-rated or scrapped, according to a senior official of the State Government.
"CST accounts for about 20 per cent of the revenues of the State (about Rs 2,000 crore). There is no mechanism so far whereby the State would get compensated for the possible revenue loss from the phasing out or elimination of CST," the official said, adding that the State had rich coal and iron-ore deposits. This situation on the CST front was brought to the attention of the BJP high command at the meeting of the conference of chief ministers of BJP-ruled states held.
The Empowered Committee of State Finance Ministers on VAT has already taken an in-principle decision to reduce the CST ceiling rate from 4 per cent to 2 per cent from April 1 next.
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