PHD Chamber welcomes reduction in CST
The PHD Chamber welcomes the reduction in Central Sales Tax rate on inter-state sales from 3% to 2%. The notification, ending the uncertainty, is a step in the right direction that would pave the way for introduction of Goods and Services Tax (GST) by the year 2010 as planned by the Government.
While the issue of compensation of the States needs further clarity, it may be appreciated that with the introduction of VAT, the revenue of the State Governments has seen a significant rise and even the insolvent States have now started gaining financial strength. Keeping in view the spiraling price rise, the Government should resist any such measure that could further fuel an increase in prices.
The States should desist from any increase in VAT so that the ordinary consumer is not burdened further. It may also be considered that the State Governments would also witness a rise in revenue on account of the rising prices.