State FMs to press Pranab for CST compensation release

State finance ministers are likely to press for immediate release of Central Sales Tax (CST) compensation during their pre-Budget consultations with Finance Minister Pranab Mukherjee tomorrow.

"We will discuss the issue of CST compensation in our meeting with the Finance Minister tomorrow," Bihar Deputy Chief Minister Sushil Kumar Modi, who heads a panel of state finance ministers on GST, told PTI.

Mukherjee is holding pre-Budget consultations with various stakeholders, including the finance ministers of states and Union  Territories, in the run up to the Union Budget for FY13.

The Empowered Committee of State Finance Ministers on Goods and Services Tax (GST) has already deliberated on the issue of CST in their meetings.

Several states have expressed unhappiness over the delay in release of funds by the Centre to compensate them for revenue losses on account of phased withdrawal of CST.

The Centre has released only Rs 900 crore to states as CST compensation, as against the provision of Rs 12,000 crore in the Budget for FY12.

CST, a tax imposed on the inter-state movement of goods, was reduced from 4% to 3% in FY08 and further to 2% in FY09 after the introduction of Value-Added Tax (VAT).