The central government will compensate states for their revenue loss from gradual reduction in central sales tax (CST) by allocating sufficient funds in the revised estimates for Budget 2014-15, finance minister Arun Jaitley informed the Lok Sabha on Friday.
States have been demanding full compensation for their revenue loss for 2010-11. As per a formula agreed between the union and state governments, states’ revenue loss from CST reduction shall be fully compensated for 2010-11, 75% for 2011-12 and 50% for 2012-13.
