The Tamil Nadu government has urged the Centre to pay the compensation claim on account of reduction in central sales tax (CST) and implementation of value added tax (VAT), amounting to around Rs 4,055.5 crore.
At a state finance ministers’ meeting in Delhi on Friday, Tamil Nadu finance minister K Anbazhagan said the state was yet to receive the full payment of the truncated VAT-related compensation promised by the Centre.
“Such withholding of agreed compensation to states certainly will not inspire confidence among the states regarding a fair GST regime.”
The minister also said the proposed goods and services tax (GST) should, in no way, erode states’ fiscal autonomy and this could be ensured only by keeping GST within the ambit of the mandatory provisions of Article 270 of the Constitution of India.
Also, the roadmap towards GST should be carefully chalked out based on consensus and not compulsion.
The targeted implementation date of April 1, 2010, is pre-mature and hurried, especially since even VAT, the precursor to GST, has not yet stabilised.
