On the basis of the discussions between the Empowered Committee (EC) of State Finance Ministers and the Union Finance Minister regarding the compensation package, the Government of India, Ministry of Finance, Department of Revenue has issued a notification on 30th May, 2008 to bring into effect from 1st June, 2008 the new reduced rate of CST of 2 per cent on inter-State sales of goods. The notification of new CST rate of 2 per cent in place of earlier 3 per cent is in accordance with the announcement made by the Union Finance Minister in his budget speech in Parliament in February 2008 that the rate of Central Sales Tax would be reduced.
The rate of CST on inter-State sale of goods to registered dealers (against Form-C) shall now be the lower of 2 per cent and the rate of VAT or State Sales Tax applicable. This reduction forms a part of the roadmap for phasing out CST completely by 31st March, 2010 in preparation of introducing Goods & Services Tax (GST), the roadmap for which is being worked out by the EC of State Finance Ministers together with the Union Finance Ministry.
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.
BSC/vk/134/08
Central Sales Tax (CST) reduced to 2% from 1st June, 2008
Last updated: 31 May 2008
Follow on
Google News
News posted by
CCI News Desk
Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.
Recent News :
- CBDT Notifies NaBFID 10-Year Zero Coupon Bond Under Income Tax Act, 2025
- ICAI Issues Public Warning After Repeated Attempts to Gain Unauthorized Access to Its Digital Systems
- Core Industries Index Overhauled with 2022-23 Base Year and Expanded Industry Coverage
- MCA Warns Stakeholders Against Fake Calls, WhatsApp Messages and Phishing Scams
- ICAI Inaugurates Global Summit 2026 to Strengthen India's Leadership in Global Capability Centres
- Social Protection Fund Notified as Specified Person Under IT Act 2025 for Tax-Exempt Investments in India
- Centre Revises Excise Duty Rates on Petrol and Diesel Components; Changes Effective from 16th July 2026
- CBDT Notifies Cost Inflation Index (CII) for FY 2026-27 Under Income Tax Act, 2025
- ICAI Keeps Global Networking Guidelines 2025 in Abeyance Until Further Orders
- Direct Tax Collections Rise 16.4% to Rs 6.51 Lakh Crore as on 13th July 2026 for FY 2026-27
Popular News
- CBDT Notifies NaBFID 10-Year Zero Coupon Bond Under Income Tax Act, 2025
- CBDT Notifies TDS Exemption for Specified Payments to IFSC Units Under Income Tax Act 2025
- CBDT Notifies Cost Inflation Index (CII) for FY 2026-27 Under Income Tax Act, 2025
- ICAI Introduces New Tax Audit Count Tracking Feature on UDIN Portal
- MCA Extends CCFS-2026 Deadline to 31st August 2026 Amid Data Centre Restoration
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
