Odisha seeks early decision on compensation for CST loss

Bhubaneswar: Odisha Chief Minister Naveen Patnaik on Tuesday reiterated the demand for an immediate decision by the Centre on compensation for loss of states’ share in the Central Sales Tax (CST) for 2013-14 to 2016-17.

“As you are aware, the states are facing financial constraint due to a slowdown in the economy, and the loss of revenue on account of reduction in rate of CST during the years 2013-14 to 2016-17 has further impacted their financial position,” said the Chief Minister in a letter to Union Finance Minister Arun Jaitley.

Referring to the recommendations made by the Empowered Committee of State Finance Ministers at a meeting in Bhubaneswar on January 28 and 29, 2013, he said the central government was required to give 100 per cent CST compensation to states up to the year 2010-11, 75 per cent CST compensation for the year 2011-12 and 50 per cent CST compensation for the year 2012-13.

“In the said meeting, it was also decided to review payment of full CST compensation for the year 2013-14 and 2014-15 in case GST is not implemented during the year 2013-14,” said Patnaik.

While the Centre has been accordingly releasing the compensation for CST loss to the states up to 2012-13, no decision has been taken on the compensation for CST loss to states for 2013-14 to 2016-17, he said.

Notably, the central government has decided to implement Goods and Services Act (GST) from April 1, 2017. The GST bill was passed in parliament in August and has been ratified by more than 16 states, including Odisha.