| The lower compensation is because the outgo on account of compensation to states and Union Territories in 2005-06 is now expected to be lower at around Rs 3,000 crore against a provision of Rs 5,100 crore for 2005-06. |
| Also, from the next fiscal, compensation to states will be only for 75 per cent of the losses incurred against 100 per cent compensation this year. Barring Uttar Pradesh, Tamil Nadu, Madhya Pradesh, Gujarat, Rajasthan, Chhattisgarh and Jharkhand, all other states have imposed the VAT. |
| For phasing out the 4 per cent central sales tax "" the process to start in the next fiscal "" the finance ministry is awaiting final recommendations from the state empowered committee set up to look into the issue of compensation. |
| A proposal for 100 per cent cash compensation mooted by the committee has not found favour with the finance ministry. The issue is expected to be taken up by the committee at its next meeting on January 30. |
| According to information available with the ministry, compensation disbursed to states till December 31, 2005, amounts to Rs 1,317 crore against claims of Rs 1,647 crore. Until now, Andhra Pradesh, Bihar, Karnataka, Kerala, Maharashtra, Sikkim, Tripura and West Bengal have claimed compensation under the VAT. |
| "With three months remaining for the current fiscal, we are anticipating a maximum claim of an additional Rs 1000 crore," an official said adding that the average growth rate under the VAT regime till December 31, 2005 had been around 15 per cent. |
| Officials said revenue collected through the VAT in Andhra Pradesh was also improving. The state has been disbursed Rs 194 crore by the Centre so far and now has outstanding claims of Rs 135 crore for the July-October period. |
| Karnataka, however, continues to be a cause for concern. The state had claimed Rs 464 crore for the April-July period, which was later revised by the Centre to Rs 251 crore. |
| Revenue collection in Maharashtra is also picking up. |
Top Section
Explore Business Standard