Centre ready for fresh look at CST compensation issue: Pranab
New Delhi: Seeking to build bridges with states, Finance Minister Pranab Mukherjee Wednesday said he would look into their demand for Central Sales Tax (CST) compensation and deal with the problem of debt-ridden states of Kerala, Punjab and West Bengal.
"Our effort is to build health relationship with states," he said replying to a debate on the Budget in the Rajya Sabha.
On the issue of compensation against revenue loss to states on account of reduction of Central Sales Tax (CST), Mukherjee said he had received a letter from the chairman of the Empowered Committee of state Finance Ministers and has an open mind on the issue.
"I have not closed the issue...I will look into it," he said in response to the demand of the states to continue with the compensation or hike the CST rate to original 4 percent, which was slashed to 2 percent to pave way for implementation of the Goods and Service Tax (GST).
The Constitution Amendment Bill on GST is being scrutinised by the Standing Committee on Finance.
Referring to the problem of three debt-stressed states of Kerala, Punjab and West Bengal, Mukherjee said a committee was appointed to look into the issue and appropriate decisions would be taken by the 14th Finance Commission.
He further said that out of the Rs 41,000 crore that he had proposed to raise through tax proposals in the budget for 2012-13, 32 percent would go to states.
Most of the states are revenue surplus, the Minister said, adding he was looking into the problems the debt-ridden states which are few.