The Union Cabinet has approved a proposal for providing Central Sales Tax (CST) loss related compensation to States for the loss incurred in FY 2010-11. The Cabinet has also approved to make on account payment of compensation to the States, pending finalization of the guidelines, for revenue loss incurred by States in year 2010-11 because of reduction in CST rate.

Central Sales Tax compensation for states authorised; on-account payments allowed pending final guidelines for revenue loss from CST rate reduction. Central Sales Tax compensation is approved to reimburse States for revenue loss due to CST rate reduction, and the Cabinet authorised on-account payments to States pending finalisation of detailed guidelines to enable provisional disbursement.