FM may provide Rs 12-k cr in this Union Budget for GST roll-out

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FM may provide Rs 12-k cr in this Budget for GST roll-out
The finance minister P Chidambaram, in the upcoming Union Budget, may provide Rs 12,000 crore for compensation to states on account of losses incurred on reduction in central sales tax rate, indicating that North Block is ready to accept the demands of state FMs to roll out GST as soon as possible.

Media reports said that Chidambaram has directed empowered committee of state finance ministers to prepare a draft of the GST law as he plans to implement the most ambitious scheme of UPA government by December this year.

FinMin has to pay Rs 34,000 crore to states as compensation for the reduction in CST for three years beginning 2010-11. For the initial year, the centre has already paid Rs 6,703 crore out of Rs 19,000 crore and the balance may be provided in this budget.

The indications of such a move came after FM met states finance ministers on Thursday to discuss progress achieved on the contentious issues that were holding up GST, as Chidambaram has already said that he would like to share contours of GST in upcoming budget.

Besides, a panel set up by FM comprising state and central government officials has suggested 100 per cent compensation for 2010-11, 75 per cent for 2011-12 and 50 per cent for 2012-13.

Read more about: union budget 2013
Story first published: Friday, February 15, 2013, 10:30 [IST]
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