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State finance ministers meet on Jan 28

Bhubaneswar: Finance ministers of various states would discuss their next course of action on non-payment of compensation owing to loss due to reduction in central sales tax (CST) rate by the Centre at a two-day meet being held here from January 28.
    
"Though the Centre had earlier assured us that it would pay compensation for reducing the rate of CST, the promise was not kept. It has been a major cause of concern for state governments," Odisha Finance Minister Prasanna Acharya said.
    
Acharya said Odisha's accumulated loss due to non-payment of compensation owing to CST would be about Rs 1,500 crore. "We have lost about Rs 800 crore in 2011-12 due to the Centre's wrong policy," he said.
    
Stating that Odisha was happy to host the meeting of Empowered Committee of Finance Ministers of States in January 28 and 29, Acharya said since the central government was not able to introduce GST (Goods and Service Tax), it should allow the states to raise the rate of CST.
    
Originally, the Centre was planning to introduce GST in 2010. However, it could not be achieved as a related bill was vetted by the Parliamentary Standing Committee.
    
The rate of CST was reduced to two per cent from four per cent, he said adding Bihar's Deputy Chief Minister and Finance Minister Sushil Modi would preside over the two-day meeting.

Finance ministers of at least 18 states have so far given their consent to attend the meet, he said.
    
Besides, the meeting will deliberate at length on the issues concerning CST, GST, VAT and non-VAT revenue, Acharya said.

(Agencies)

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