Chennai: The Tamil Nadu government on Saturday clarified that  non-implementation of the Goods and Service Tax (GST) from April 1, 2010 should not be the ground for stopping Central
Sales Tax compensation to states, whose revenue loss is "substantial and permanent".
"Since it is the Government of India's responsibility to introduce GST by evolving a consensus and by putting in place appropriate mechanisms, the states cannot be expected to bear the loss on account of its failure to introduce GST," Chief Minister Jayalalithaa wrote to Prime Minister Manmohan Singh,
seeking his personal intervention to sort out the issue.

Jayalalithaa said, "Government of India has a moral responsibility to compensate states till GST is introduced."

The CST rate was reduced only as a precursor to introduction of GST, she said.