Post News Network
Bhubaneswar, Sept 20: After ratifying the Goods and Service Tax (GST) Bill September 1, the state government Tuesday urged the Union government to take immediate steps for compensation of Central Sales Tax (CST) loss to the states for the years between 2013-14 and 2016-17.
In a letter to Union Finance Minister Arun Jaitley, Chief Minister Naveen Patnaik drew his attention to the issue of compensation of loss of revenue suffered by the states due to reduction of CST rate from 4 per cent to 2 per cent as recommended by the empowered committee of state finance ministers in the meeting held in Bhubaneswar in 2013.
As per the meeting, Patnaik said, the Centre was required to give 100% CST compensation to states up to 2010-11 fiscal, 75% for 2011-12 fiscal and 50% CST for 2012-13 fiscal.
At the meeting it was also decided to review the payment of full CST compensation for the year 2013-14 and 2014-15 in case of non-implementation of GST in 2013-14, he added.
“The Union government has been releasing the compensation amount to the states up to 2012-13 financial year, but has not taken any decision regarding compensation of CST loss for the years between 2013-14 and 2016-17 fiscals,” Patnaik said in the letter to Jaitley.
The CM also said that “the states are facing financial constraint due to economic slowdown and the loss of revenue on account of reduction of CST rate during the years from 2013-14 to 2016-17 have further impacted their financial position.”
Notably, the Union government has decided to implement GST from April 1, 2017. The GST bill was passed in the Parliament in August and it has been ratified by more than 16 states including Orissa. Previously, the state government had claimed CST loss of `2,908.82 crore for the financial years between 2012-13 and 2014-15.
