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| Haryana demands CST compensation from Centre |
| BS Reporter / New Delhi/ Chandigarh Jan 11, 2010, 00:01 IST |
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Haryana Finance Minister Captain Ajay Singh Yadav today urged the Centre that the compensation for the Central Sales Tax (CST) for the last two financial years be released in entirety to the state. This is because Haryana happened to be the biggest loser after the Centre’s proposal toroll out the Goods and Services Tax (GST) and consequently abolish CST.
Yadav, who was speaking at a meeting of the finance ministers of all states held under the chairmanship of Union Finance Minister Pranab Mukherjee in New Delhi, suggested the compensation formula should be retained as such for the current financial year also and the states should also be compensated for the loss on account of reduction in CST rate for the forthcoming year 2010-11.
Referring to the commitment of the state to support its farming community, Singh informed that the state gave huge subsidy on agricultural inputs and in lieu of that recovered a very minuscule amount in form of levy of purchase tax. He opined in the meeting that the purchase tax should be continued to be levied in its present form. He urged the Union finance minister to re-work the compensation claims of the state government for the years 2007-08 and 2008-09 on account of phasing out of CST. He also urged the Centre to keep the method of working out the compensation package for the year 2009-10 as existing.
The minister further said that as per the road map of GST drawn by the empowered committee of state finance ministers in consultation with the officers of the Union Finance Ministry, CST was to become zero rated from April 1,.2010 and for the year 2007-08 and 2009-10, the Centre was to compensate the states for loss incurred on account of phasing out CST.
He said Haryana had filed compensation claims worth Rs 1,959.99 crore for 2007-08 and 2008-09, but the compensation claims received till date had been to the tune of Rs 1,446.49 crore only and as such the compensation received with regard to last two financial years had been Rs 513.5 crore less than the claims submitted by the government.
The state government was informed that the compensation claims for these two years had been finalised, which means that the compensation claims of the state with regard to Rs 513.50 crore had been rejected.
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