To facilitate the roll-out of GST from April, 2013 the Centre has assured that it is willing to consider states’ demands of compensation for reduction in CST rate, Chairman of Empowered Committee of State Finance Ministers, Mr Sushil Kumar Modi said here on Tuesday.

“We discussed the entire GST in detail with the Finance Minister (Pranab Mukherjee), including the CST compensation. The Minister said chapter of compensation is not closed and he has an open mind regarding compensation,” Mr Modi added.

CST is payable on inter-state sales at two per cent.

Although CST is levied by the Centre, the revenue goes to the state government and the state from which movement of goods commences gets revenue.

The Centre has promised to compensate states for loss of revenue due to reduction in CST rate to 2 per cent from 4 per cent.

The state governments had expressed dissent over the Rs 300 crore CST compensation proposed in the Budget 2012-13. This was against their overall demand of over 19,000 crore.

The states have demanded that either the Centre should pay the compensation in full or restore the levy to original level of 4 per cent.

“Committee of some senior official of the central government and from states will sit together and sort out this problem of compensation. And in the first week of May, the Union Finance Minister will have meeting with state finance ministers,” Mr Modi said.

“I am confident that by April 2013, GST can come because the Bill is pending before Parliamentary Standing Committee and they will start discussion on the Bill in the second or third week of May,” Modi added.

Related Topics
comment COMMENT NOW