Naveen writes to Jaitley on compensation for CST loss

Bhubaneswar, Sep 20 (PTI) Batting for states, OdishaChief Minister Naveen Patnaik today urged Union FinanceMinister Arun Jaitley to take immediate steps for compensatingthem for the Central Sales Tax (CST) loss for four financialyears, 2013-14 to 2016-17, on account of GST rollout. "I would, therefore, request that the Union Governmenttake immediate decision for compensation of CST loss to statesfor the year 2013-14 to 2016-17. I look forward to yourresponse in the matter at the earliest," Patnaik wrote toJaitley. Billed as the biggest tax reform since Independence,India is looking to rollout the Goods and Services Tax fromApril next year. The GST will subsume various indirect taxesat the state as well as the central level and have uniformrates making the country a more cohesive market for movementof goods and services nationwide. Patnaik said states had earlier reduced the rate ofCST from 4 per cent to 2 per cent as per the recommendation ofthe Empowered Committee of State Finance Ministers at ameeting held in Bhubaneswar on January 28 and 29, 2013. The central government was required to give 100 percent CST compensation to states up to the year 2010-11; 75 percent for 2011-12 and 50 per cent for 2012-13. "In the same meeting, it was also decided to reviewpayment of full CST compensation for the year 2013-14 and2014-15 in case GST is not implemented during the year2013-14. Accordingly, the Union government has been releasingthe compensation for CST loss to the states upto the year2012-13. No decision has been taken regarding compensation ofCST loss to states for the year 2013-14 to 2016-17," Patnaikmentioned in the letter. Stating that the states are facing financialconstraint due to slowdown in the economy and the loss ofrevenue on account of reduction in the rate of CST, Patnaiksaid it has further impacted the financial position of statesduring the year 2013-14 to 2016-17. He also informed the Union Finance Minister thatOdisha Legislative Assembly has ratified the Constitution(122nd Amendment) Bill, 2014 unanimously as passed by bothHouses of Parliament by convening a special session of theAssembly on September 1, 2016. PTI AAM SUS SAPS

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