The Empowered Committee of state finance ministers will meet on January 28 and 29 to discuss the next course of action on non-payment of compensation by the Centre on account of the loss sustained by the states due to reduction in central sales tax (CST) rate.
The two-day meeting, which will be presided over by deputy chief minister and finance minister of Bihar Sushil Modi, will be attended by the finance ministers of at least 18 states.
Besides the CST compensation, the meeting will deliberate at length on the issues concerning CST, GST, VAT and non-VAT revenue.
?The CST compensation outstanding has become a major concern for all the states”, Orissa finance minister Prasanna Acharya said, adding: ?Though the Centre had earlier assured us that it would compensate the state loss due to reduction in CST, the promise was not kept.?
The minister said that the State?s accumulated loss due to non-payment of compensation towards CST would be about Rs 1,500 crore.?We have lost about Rs 800 crore in 2011-12 due to the Centre?s wrong policy,? he said.
Since the Centre is not able to introduce the new tax system called GST (Goods and Service Tax), it should allow the states to raise the rate of CST, he said.
In its earlier meeting, the empowered committee had recommended the Centre to continue the existing central sales tax (CST) till shifting to the new tax regime called goods and services tax (GST).
The committee which had submitted a roadmap on GST to the finance ministry had requested Prime Minister Manmohan Singh to convene a meeting soon to discuss and decide on the proposed dual GST at Central and state-level. Originally, the Centre was planning to introduce GST in 2010.
