New Delhi: The Finance Ministers of the states are likely to impose pressure on the Centre for immediate release of Central Sales Tax (CST) compensation during their pre-budget consultations with Union Finance Minister Pranab Mukherjee on Wednesday.

Deputy Chief Minister of Bihar ,Sushil Kumar Modi  who also heads the panel of state Finance Ministers on GST, said, “We will discuss the issue of CST compensation in our meeting with the Finance Minister on Wednesday.”

Mukherjee is holding pre-budget consultations with various stakeholders, including the Finance Ministers of states and Union Territories, before giving a final structure to the Union Budget for the next fiscal 2012-13.

Notably, the Empowered Committee of State Finance Ministers on Goods and Services Tax (GST) has already discussed the vital issues of CST in their meetings.

Several states have expressed their displeasure over the delay in the release of funds by the Central government to compensate them for the revenue loss on account of phased withdrawal of CST.

The Centre has released mere Rs 900 crores to the states as compensation for CST against the provision of Rs 12,000 crores in the budget for 2011-12.

Notably, CST which is a tax imposed on the inter-state movement of goods, was reduced from 4 percent to 3 percent in 2007-08 and further to 2 percent in 2008-09 after the introduction of Value-Added Tax (VAT).

(JPN/ Bureau)