New Delhi: Parliament has approved a bill to phase out in four stages the Central Sales Tax (CST) and eventually abolish it in three years.
The Taxation Laws (Amendment) Bill, passed by the Lok Sabha on 19 March, was returned by the Rajya Sabha on 20 March after approving it by a voice vote without discussion.
The Bill, piloted by Finance Minister P Chidambaram, was passed amidst din with opposition BJP and other members raising slogans to demand a discussion on the killing of farmers in Nandigram in West Bengal.
The legislation proposes to reduce CST from 3% to 4% from April. It seeks to amend the CST act of 1956.
Abolition of CST will pave the way for an integrated Goods and Services Tax (GST) which will be introduced by 1 April 2010, according to the Bill.
CST will go down from 3% to 2% from 1 April 2008, from 2% to 1% from 1 April 2009 and eventually abolished from 31 March 2010.
Under the Bill, it is proposed to drop tobacco from the list of declared goods to enable states to levy VAT on tobacco at a rate higher than 4% applicable to declared goods.