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No compensation to States for CST till GST rollout: Ministry of Finance
Mr. RS Gujral, Secretary to the Ministry of Finance, while addressing a post budget event, stated that CST rate was reduced from 4% to 2% as part of phasing out of the tax in backdrop of proposed GST and the compensation was originally planned for 3 years. Further the Centre cannot compensate States endlessly for as many years as GST does not come. The States had demanded compensation of Rs 19,060 crore for 2010-11 against which the Centre released Rs 6,393 crore.
(Source: Business Standard, March 26, 2012)
State Government of Karnataka vows to support GST regime
The Karnataka State Government has committed to support the introduction of GST regime. According to the medium term fiscal plan document for the year 2012-2016, the State Government would insist upon retaining the State's autonomy to determine its tax level on domestic compensation. The State Government maintained that GST regime would require a robust IT infrastructure to achieve its aim of widening tax base and increasing revenue through better compliance along with removal of cascading effect of taxes leading to lower prices.
(Source: www.ibnlive.in, March 22, 2012)
Published March 26, 2012
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