Phasing out of CST, a major hurdle in implementation of GST: Modi

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Patna, Jan 12 (UNI) Bihar Deputy Chief Minister Sushil Kumar Modi has apprehened that the phasing out of Central Sales Tax(CST) from States prior to the implementation of Goods and Services Taxes(GST) at the national level by 2010 would not serve any purpose, unless the issue of revenue losses was resolved.

Addressing a seminar on preliminary steps to evolve strategies of Bihar government on the issue here last night, Mr Modi, also holding the Finance Ministry portfolio, said though the phasing out of CST was pre-requisite to implementation of the GST, several States had already resented the expected loss of revenue and felt that alternatives offered by the Centre to compensate it was ''inadequate''.

'' The Centre has permitted the States to collect service taxes in 44 categories, but the scope of revenue generation in most of them was poor, '' Mr Modi pointed out, saying the Centre should extend adequate financial assistance to States to compensate their revenue losses following the phasing out of CST.

'' In Bihar, the total revenue loss was estimated to the tune of around Rs 80 crore, while it could be around Rs 600-700 crore in southern States, '' Mr Modi said and claimed that they were bound to face greater difficuties.

The rates and modalities of collection of the GST were other major issues needed to be sorted out to ensure smooth implementation of GST from April 10, 2010, he further observed.

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