The state governments have urged the Centre to continue levying central sales tax (CST) for the first few years as it will provide some comfort in terms of protecting revenue and fiscal autonomy. This demand came after the union government proposed a three-rate structure for the goods and services tax(GST) last week.

CST is levied on the inter-state movement of goods and was cut from 4% to 3% from April 1, 2007, and then to 2% in 2008. As part of the implementation of value-added tax (VAT) it was to be reduced by 1% every year and made nil by April 2011, but it has not been cut further. Although it is called the Central Sales Tax, the tax collected under the CST Act is kept by the state. Experts are of the opinion that as CST is an origin-based tax, continuing with it may create problems because GST is a destination-based tax.

The Centre has earlier announced that it would provide full compensation to the states for any revenue loss on account of CST reduction in 2009-10 and release the balance outstanding amount immediately.

More Under Goods and Services Tax

Posted Under

Category : Goods and Services Tax (8431)
Type : News (14085)
Tags : CST (91) goods and services tax (6869) GST (6470) value added tax (34) Vat (229)

0 responses to “States governments demand CST to continue with GST”

  1. aashish says:

    really it’s humorous that till date vat is not implied whole over the INDIA AND THE GOVT. WANTS TO IMPOSE NEW ACT ON THE PUBLIC LIKE A PUPPET SHOW!!!!!!!!!!!!!!!!!

  2. Antaryami Acharya says:

    Even the subsumation of State entry tax has not been addressed. If that is not removed, purpose of GST will be lost. In Entry tax, the same dealer taking goods from one unit to its other unit at different local area of the same state, has to pay additional tax i.e entry tax

  3. Venkateswara Rao Sapare says:

    It is not new that every reform will have one or other teething problems. The GST should be impleted in its full length and breadth, whatfor, it is fundamentally conceived. Accomodating these sort of demands/urges here or there will defeat the real purpose of the GST. The Centre should lead and educate the concerned in States and dispel the apprehensions.

    Venkateswara Rao Sapare, Hyderabad – 500008

  4. Dayal says:

    This is against the IGST concept and will pose difficulty in addressing dual provisions under GST and CST


    one of the aim of National Leval GST to reduce tax cascading. If CST continues along with the GST in the present form where no credit of CST is available, how the tax cascading will come to an end? CST should be ended with the advent of GST.

Leave a Reply

Your email address will not be published. Required fields are marked *