Reduced rate of CST would be effective from 1-5-2008

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....educed rate of CST would be effective from 1-5-2008 <br>News and Press Release<br>Dated:- 9-4-2008<br><BR>Finance Minister Mr. P Chidambram has informed the parliament during his budget speech that the CST rate will be reduced with effect from 1-4-2008. The text of speech of FM is reproduced hereinafter: "183. Following an agreement between the Central Government and the State Governments, the ra....

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....te of Central Sales Tax was reduced from 4 per cent to 3 per cent in this financial year. It is now proposed to reduce the rate to 2 per cent from April 1, 2008. Consultations are underway on the compensation for losses, if any, and once agreement is reached the new rate will be notified. I am also happy to report that there is considerable progress in preparing a roadmap for introducing the Goods....

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.... and Services Tax with effect from April 1, 2010." But, the central government did not issue any notification for reduction of CST from 3% to 2%. Based on the speech of Finance Minister in Parliament, a majority of businessmen started charging CST at the rate of 2%. Since there is genuine misunderstanding in the field about the reduced rate of CST, the businessmen who charge 2% might be penaliz....

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....ed for less charging of CST in future. Now, Asim Dasgupta, chairman of the empowered committee of state finance ministers, told reporters after meeting Union finance minister P Chidambaram that, "The Centre and state governments have agreed to carry out a constitutional amendment to facilitate levy of VAT on imports. Both sides will now meet on April 16 to rework the modalities of compensation fo....

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....rmula for reduction of central sales tax (CST) from 3% to 2% expected from May 1" (Source: Economic Times) We wish that the Central Government should come out with some clarification without any loss of time to remove the confusion and to make the stand clear.<BR> News - Press release - PIB....