03/06/2009
Madras HC: Tax planning has legal sanction
The Madras High Court has ruled that tax planning as opposed to tax evasion has legal sanction, and if a dealer plans his transactions in such a manner that he pays less tax, it is not open to the revenue to subject him to a conscience audit or moral assessment. The power to lift the veil has to be exercised with great care and caution. Justice V Ramasubramanian on Friday allowing petitions by a registered dealer, challenging the orders of assessment passed by the Assistant Commissioner, Coimbatore, under the Central Sales Tax Act for assessment years 2001-02, 2002-03 and 2003-04.
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31/05/2008
Tax reforms back on track, CST cut to 2% from June
Ending uncertainty over a major tax reform initiative, the central government on Friday notified reduction in central sales tax (CST) to 2% from June 1 as compared to the current 3%. ”The central government and the empowered committee of state finance ministers have further agreed that the compensation for revenue loss to the states in any year arising from the lowering of CST will be limited to the proportionate loss based on the actual collection of CST in the relevant year, ” a finance ministry statement said. Elimination of CST is crucial to implementation of unified goods and service tax from April 1, 2010.
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06/05/2008
State Finance Ministers’ panel moots CST cut to 2%
The empowered committee of State Finance Ministers has decided to propose a reduction in the central sales tax (CST) from the existing three per cent to two per cent. This is a step towards the introduction of Goods and Services Tax (GST) from 2010-2011 by phasing out CST, value-added tax and other taxes, thereby bringing in a unified tax regime encompassing both the Centre and the states. The process of phasing out CST started in 2007-08 with the rate having been reduced from four per cent to three per cent.
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03/05/2008
States adamant, Centre misses CST cut date
The anticipated cut in the central sales tax (CST) rate from 3 per cent to 2 per cent that was to come into effect from yesterday has not been notified due to differences between states and the central government over the compensation package. The differences may be resolved at a meeting of the Empowered Committee of State Finance Ministers scheduled for May 5-6.
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02/05/2008
CST phase-out misses deadline as states,Centre continue spat
The reduction of central sales tax from 3% to 2% has missed its revised deadline of May 1, as the stalemate between the Centre and state governments on the compensation package continues. Government sources told FE that negotiations between the Union finance ministry and the empowered committee (EC) of state finance ministers were carried out till late on Wednesday but the two sides failed to reach a consensus. The state finance ministers’ EC is meeting again on May 5 to discuss the issue further after which it is likely to come back to the Centre with a new compensation formula. The further reduction by one percent in the CST rate is part of the phase-out plan for the tax and introduction of the goods and services tax by 2010.
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01/05/2008
CST cut still taxing on compensation row
Uncertainty looms large over the reduction of central sales tax (CST) from 3% to 2% from May 1, with the Centre and states yet to agree on the compensation package. CST phaseout has already missed the April 1 deadline. It was expected the empowered committee of state finance ministers and the Centre will be able to sort out differences that had arisen on the compensation package, and reduction to 2% can be carried out from May 1. The issue will now be discussed at the next meeting of the empowered committee in Trivandrum this month.
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17/04/2008
CST impasse persists as states seek higher sops
Uncertainty over the proposed move to reduce Central Sales Tax (CST) rate from 3% to 2% refuses to end. State governments are seeking a higher budgetary support from the Centre as part of the compensation package in lieu of the reduction. The states are not willing to hike floor Value Added Tax rate, as proposed by the Centre. The states also want to hold consultations with stakeholders before they take a decision on the removal of additional excise duty on textiles and imposition of VAT.
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10/04/2008
Centre should take lead to resolve CST issues
THE state governments’ reluctance to increase the floor rate of value added tax (VAT) is understandable, given that political parties that manage these governments are invariably facing the convenient venting of fury over rising prices by their respective Opposition. (The actors change their roles to suit locality). Remember that Parliament elections are not that far way and elections to many state assemblies are due this year.
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08/04/2008
Central sales tax ceiling rate may come down to 2%
Reduction of Central sales tax (CST) ceiling rate from 3 per cent to 2 per cent may soon become a reality, with the Centre and the State Governments set to meet on Tuesday to sort out the thorny issues on compensation for the revenue losses that may arise to the States from such a move. Official sources said that the Finance Minister, Mr P. Chidambaram, and the Chairman of the Empowered Committee of State Finance Ministers on Value Added Tax (VAT), Dr Asim Dasgupta, are to hold consultations on the compensation issue here on Tuesday.
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19/03/2008
CST phase-out plan may breach deadline
With the compensation package for states yet to be finalised, the phase-out process of central sales tax (CST) may go off track. The reduction in the rate of central sales tax (CST) from 3% to 2% may now be delayed from April 1 this fiscal, sources said, as the Centre and state governments are yet to finalise a compensation package for further 1% cut in the tax rate. “If the state governments have a meeting with the Union finance ministry by next week and finalise the compensation, then only will the rate cut be notified from April 1,” a government source said. The date for notification will otherwise get pushed to sometime later in the year after the package is finalised, he added.
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