| States agree to CST phase-out from April |
| Press Trust of India / New Delhi January 3, 2007 |
| The Central Sales Tax (CST) may be cut to three per cent next fiscal as the finance ministry and finance ministers of different states have reached a "broad consensus" on a compensation package to be given to states for revenue loss due to CST reduction. "I am happy to report a broad consensus has been reached on the issue of phasing out CST," Finance Minister P Chidambaram told reporters after one-and-a-half hour meeting with Empowered Committee of State Finance Ministers on value-added tax (VAT). The CST, which is currently at four per cent, acts as a distortion to the uniform tax structure at state level as it is imposed on inter-state sale of goods, whereas the purpose of the VAT is to create a common market. |
