New Delhi, Mar 18 (KNN) Government has approved the release of Rs 33,000 crore in three tranches to states and Union Territories to compensate them for revenue loss on account of phasing out of Central Sales Tax for three financial years up to 2012-13.
 
The loss incurred was on account of reduction in central sales tax (CST) from four percent to two percent for three years from fiscal 2010-11.
 
The amount of compensation for 2010-11, 2011-12 and 2012-13 will be released in three phases i.e. in 2014-15, 2015-16 and 2016-17.
 
There is a provision in the budget for payment of CST compensation in revised estimates for 2014-15 and it will be used to release payment to states. With this move the government hopes that these claims will help create an enabling environment for the roll out of goods and services tax (GST).
 
The cabinet in February 2007 decided to phase out CST and to compensate states for the revenue loss.
CST is a tax that is imposed on the inter-state movement of goods though is a central levy but it is administered by the concerned State and is in effect since (KNN/VV)