The Hindu : Business : Bill to phase out CST introduced

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Saturday, Mar 10, 2007
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Bill to phase out CST introduced

Special Correspondent

NEW DELHI: The Central Government on Friday introduced the Taxation Laws (Amendment) Bill, 2007, which seeks to phase out the Central Sales Tax (CST) in four stages, leading to its eventual abolition in three years.

The abolition of the CST on inter-State sale of goods to registered dealers is aimed at ushering in an integrated Goods and Services Tax (GST) at the Central level which is to be introduced from April 1, 2010.

Piloting the amendment Bill in the Lok Sabha, Finance Minister P. Chidambaram informed members that in the first stage, beginning April 1, 2007, the CST is slated for reduction from four per cent to three per cent. In the subsequent three stages, it is to be brought down to two per cent from April 1, 2008, and further to one per cent from April 1 the following year and eventually abolished by March 31, 2010, to pave the way for introduction of the GST from April 1 that year, he said.

Under the Bill, tobacco is proposed to be dropped from the list of declared goods which would enable the States to levy VAT on it at a rate higher than the four per cent that is applicable on declared goods.

Alongside, the Additional Duties of Excise (Goods of Special Importance) Act, 1957, is proposed to be amended to drop tobacco from the First Schedule of the Act.

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