Govt to phase out Central Sales Tax by April 2007
Wednesday, April 6 2005 13:04 Hrs (IST) - World Time - 
New Delhi:
The Government today (Apr 6, 2005) said it would phase out Central Sales Tax (CST) by April 2007, a move that may lead Bharatiya Janata Party (BJP)-ruled States to reconsider their decision of not implementing Value-Added Tax (VAT).
"CST is a barrier and Empowered Committee of State Finance Ministers is working to remove it. We have determined that the rate of CST will come down to two per cent from April 1, 2006, before being ultimately phased out from April 2007," VAT panel secretary Ramesh Chandra said at a Confederation Of India Industry (CII) seminar in New Delhi.
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BJP-ruled States Rajasthan, Gujarat, Madhya Pradesh, Chattisgarh and Jharkhand have said they will not implement VAT till the Government announces a clear roadmap to phase out CST.
Chandra asked the States, who have not yet joined VAT, to implement the new tax regime.
"Eighteen States have joined from April 1 and Assam and Meghalaya will be joining from Friday. I urge States like Rajasthan, Gujarat, Madhya Pradesh, Chattisgarh and Jharkhand also to implement VAT immediately," he said.
With the phasing out of CST, Government would work towards a system of integrated Goods and Service Tax, he said.
"This will be the next big thing after VAT in terms of tax reforms," he added.
PTI
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