State to get Rs 1000cr on CST loss
Odisha, whose accumulated loss due to non-payment of compensnation on CST loss amounted Rs 1500 crore, would get the amount after the states agreed to accept the reduced rate of compensation, said Acharya.
Finance ministers of various states in the two-day Empowered Committee meeting here also sought Centre's nod to revert to 4 per cent CST in case of non-introduction of GST from April.
The decision in this regard was taken at the meeting chaired by Bihar Deputy Chief minister and Finance Minister Sushil Kumar Modi.
According to the resolution at the meeting on CST issue the Centre would bear 100 per cent of the loss of states due to cut in the rate of CST in 2010-11 fiscal and give 75 per cent on loss of states in 2011-12 and 50 per cent for 2012-13, Modi said.
The states had reduced the rate of CST in phased manner from four per cent to two per cent as per a central directive for introduction of the Goods and Service Tax (GST) in 2010. The centre had then promised the states that it would bear losses due to reduction of CST.
"However, the promises were not kept," Modi said adding the Empowered Committee accepted a central proposal to reduce the rate of compensation for early payment.
"The amount of compensation for three years – 2010-11, 2011-12 and 2012-13 was about Rs 34,000 crore. The Centre has agreed to pay this compensation amount to states," Modi said.