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Odisha demands Rs 3,417 cr as CST compensation

Bhubaneswar, December 12: Maintaining that Odisha is suffering huge loss on account of reduction in Central Sales Tax (CST) rate, Finance Minister Pradip Amat on Thursday urged the Union Government to release the balance amount of Rs 3,417.3 crore as compensation towards CST reduction at the earliest.

Speaking at the Empowered Committee of State Finance Ministers’ meeting at New Delhi Amat said, “The State has claimed Rs 4720.21 crore as compensation towards CST reduction from 2007-08 to 2013-2014, but it has received only Rs 1,303.08 crore till now.”

“Non-release of the compensation on account of loss towards CST reduction has caused trust deficit between the Centre and the States. The Centre should release the balance amount of compensation Rs 3,417.3 crore to infuse confidence in the States to move towards implementation of GST (Goods and Services Tax),” observed the Minister.

Amat said, “During 2013-14, Odisha collected Rs 1,618 crore from Entry Tax. With the subsumation of Entry Tax in GST, the RNR of the State will be higher. It is urged that while calculating the compensation for the State, the revenue loss on account of subsumation of Entry Tax may be taken into account.”

Stating that due to the application of destination principle in GST, the mineral producing States like Odisha where the pollution is localised and do not get any part of the revenue, Amat said, “It is only the consuming State that gets the tax revenue whereas due to pollution the citizens of the producing State suffer. Therefore, taking into consideration the adverse environmental impact, the mineral producing States may be empowered to levy an additional non-rebatable cess subject to suitable framing of guidelines in consultation with the proposed GST Council.”

The Minister endorsed the Empowered Committee's recommendation that Clause (3) may be added to Article 269A as “Parliament may, by law, authorise the State Governments to administer the Goods and Services Tax on supplies in the course of inter-state trade or commerce levied under Clause (1).”

Finance Secretary UN Behera and Commissioner Commercial Taxes Manoj Ahuja were also present at the meeting.

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