Odisha loses Rs 400 cr for CST cut in 2010-11: Govt

Bhubaneswar: Accusing Centre of "bullying" states by denying proper compensation for reduction in central sales tax (CST) rate, State government on Monday said it sustained a loss of about Rs 400 crore in 2010-11. "The Centre is not paying proper compensation though it agreed to make up the losses sustained by the states due to reduction in the rate of the CST," Finance minister Prasanna Acharya told the Assembly here.

Slamming the Centre for not accepting the recommendations of the empowered committee of finance ministers, Acharya said while the state sustained a revenue loss of Rs 664.39 crore for reducing CST to 2 per cent from 3 per cent in 2010-11 fiscal, it got only Rs 256.17 crore from the Centre as assistance.

The Centre had agreed to pay compensation in accordance with the CAGR (compound annual growth rate) to proportionately compensate states, he said.

Stating that the affected states were planning to meet the Prime Minister over the issue, the finance minister said Odisha was also unable to impose one per cent VAT on declared items as the Centre was not making any ratification.

"This is simply Centre`s `Dada Giri` (bullying) on states," Acharya told the assembly while ruling BJD members strongly criticised the UPA government.

Replying to another question, Acharya said the state could not collect Rs 5702.42 crore both as tax and non-tax revenue due to different court cases.

"We have directed the department to solve the cases early by appointing special counsel if required," the minister said.