Union Cabinet Approves Release Of Rs.33,000 Cr. CST Compensation To States

18 March, New Delhi

The Union Cabinet approved the release of 33,000 crore rupees in tranches to states and Union Territories to compensate them for revenue loss on account of phasing out of Centre Sales Tax, CST for the three financial years up to 2012-2013.

In the first phase 10,800 crore rupees is payable for 2010-11 as balance CST compensation. As part of the roll out of proposed Good and Service Tax, GST regime, the CST is being phased out and has been reduced to 2 percent from the earlier 4 percent.

The cabine Tuesday t also cleared the way for the signing of an agreement with the US for automatic exchange of financial account information.

This will enable India to exchange information on black money with other countries or entities that are signatories of the Foreign Account Tax Compliance Act or FATCA.

FATCA is the US federal law that requires US nationals living abroad to report their accounts and foreign financial institutions to report to about their clients.