CHENNAI: Chief Minister J Jayalalithaa on Saturday charged that certain unilateral and unreasonable decisions with regard to the Central Sales Tax (CST) taken by the Centre were causing huge revenue losses to States like Tamil Nadu. She sought the intervention of Prime Minister Manmohan Singh to sort out the issues expeditiously.The CM, in a letter to the Prime Minister, said though the Centre had agreed to compensate States for the revenue loss on account of reduction of the rate of CST for the year 2010-11 too, the eligible compensation for 2010-11 was arbitrarily restricted by deducting the additional revenue realised through revision of VAT rate from four per cent to five per cent.Chairman of the Empowered Committee of State Finance Ministers had already conveyed the objections of the State governments, including Tamil Nadu. “But, it is unfortunate that the Centre is still sticking to its unreasonable stance,” she added. The CM said the action of the Centre in linking CST compensation with the additional revenue on account of VAT rate revision was unilateral, arbitrary and untenable. “There is no link between CST rate reduction and VAT rate enhancement. It was never a part of the guidelines for CST compensation,” she pointed out.
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