CST collections go up in 10 states

Despite a one-percentage point cut in the central sales tax (CST) rate in June 2008 and the global economic slowdown following soon after....

Despite a one-percentage point cut in the central sales tax (CST) rate in June 2008 and the global economic slowdown following soon after,CST collections till December for 10 of the 20 major Indian states went up.

Answering a question put up in the Parliament today,finance minister Pranab Mukherjee,however,failed to provide any reason as to why some states had performed well in sales tax collections while others had languished. No specific reasons have been advanced by the states for the trend in CST revenues, he said in a statement.

States like Maharashtra,Gujarat,Orissa,Uttarakhand and West Bengal,among others,saw a growth in CST collection till December 2008 over the same period last year. Maharashtra had the highest collections at about Rs 1,920 crore up from Rs 1,694 crore over the same period last fiscal,followed by Tamil Nadu,whose collections actually fell marginally to Rs 1,256 crore from Rs 1,265 crore last year.

Story continues below this ad

Other states whose CST revenues fell this year included Andhra Pradesh,Bihar,Delhi,Jammu and Kashmir,Jharkhand,Karnataka,Madhya Pradesh,Pondicherry and Uttar Pradesh. On this,Mukherjee also added,The Central government however compensates states,as per mutually agreed guidelines,for the loss of CST revenue occasioned by the reduction in CST rate.

As a consequence of the ongoing economic slowdown,Mukherjee added,that the state governments of AP,Punjab,Maharashtra,Kerala,Uttarakhand and Goa have asked for additional funds and for relaxation of borrowing ceilings fixed for the current fiscal under the Fiscal Responsibility and Budget Management Act.