Bhubaneswar: Odisha Chief Minister Naveen Patnaik on Tuesday urged the Union government to take immediate decision for compensation of Central Sales Tax (CST) loss to states for the years 2013-14 to 2016-17.
“As you are aware the states are facing financial constraint due to a slowdown in the economy and the loss of revenue on account of reduction in the rate of CST during the years 2013-14 to 2016-17 have further impacted the financial position,” said the Chief Minister in a letter to Union Finance Minister Arun Jaitley.
The Chief minister drew the attention of Jaitley to the issue of compensation for loss of revenue due to the reduction of CST rate from 4% to 2% to states as recommended by the Empowered Committee of State Finance Ministers meeting held in Bhubaneswar in 2013.
The Central Government was required to give 1000% CST compensation to states up to the year 2010-11, 75% CST compensation for the year 2011-12 and 50% CST compensation for the year 2012-13.
“In the said meeting, it was also decided to review payment of full CST compensation for the year 2013-14 and 2014-15 in case GST is not implemented during the year 2013-14,” said Patnaik.
He said the Union government has been releasing the compensation for CST loss to the states up to the year 2012-13.
However, no decision has been taken regarding compensation of CST loss to states for the years 2013-14 to 2016-17, he added.
Notably, the central government has decided to implement Goods and Services Tax (GST) from April 1, 2017. The GST bill was passed in Parliament in August and it has been ratified by more than 16 states including Odisha.