States have asked centre for adequate compensation for their revenue loss due reduction in the Central Sales Tax -CST. Otherwise, the levy should be increased to the earlier rate of 4 per cent. Empowered Committee of the State Finance Minister in New Delhi also finalised a negative list of 35 services, which will notbe taxed under proposed Goods and Services Tax – GST regime.
Bihar Deputy CM and Finance Minister Sushil Kumar Modi told reporters later that if the government does not release compensation then Center should revert to the CST levy of 4 per cent from the present 2 per cent level.

The Centre is trying to phase-out the CST to usher in the new GST regime with a single tax merging excise, service tax and states tax, like value-added tax, entry tax and purchase tax.

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