State finance ministers to meet on CST
“The Centre has failed to keep its promise to pay compensation for reducing the rate of CST for which the state’s accumulated loss stands at nearly Rs 1,500 crore,” Finance Minister Prasanna Acharya said.
"Also, we have lost about Rs 800 crore in 2011-12 due to the Centre's wrong policy," added Acharya mentioning that since the central government was not able to introduce GST (Goods and Service Tax), it should allow the states to raise the rate of CST.
According to official sources in April 2007, the Union government brought down the CST rate from 4 to 3% and further reduced it to 2% in June, 2008, with a view to gradually phasing out CST and introducing GST from April, 2010.
After agreeing to compensate the states for CST loss, it did the same from 2007-08 to 2009-10. It also compensated for 2010-11 but after deducting notional gain calculated on the basis of hike in VAT rate from 4 to 5%, stopped it in 2011-12.
Bihar's Deputy Chief Minister and Finance Minister Sushil Modi would preside over the meeting in which finance ministers of at least 18 states have so far given their consent to attend.
Besides, the meeting will deliberate at length on the issues concerning CST, GST, VAT and non-VAT revenue, Acharya said.