States want CST raised to 4% till row is settled

In ANOTHER twist to the row over the central sales tax (CST) compensation, a few states have now come up with a new formula: raise the tax to the original 4% and retain it at that level till the Centre is in a position to compensate states for the revenue loss arising from the proposed phasing out of the tax. Speaking to FE, the chairman of the empowered committee (EC) of state finance ministers, Sushil Modi, said that Maharashtra had suggested that if the Centre is unable to compensate states on revenue loss, then raising CST rate to 4% from the current 2% could be considered and CST could be eliminated when the Goods and Services Tax (GST) comes into effect.

Source: Financial Express