CST – Reduction in CST Rate to 2%
The road map to GST in India envisages the reduction in CST rate from 4% to 0% by 1st April 2010 and accordingly, the CST rate should have been reduced to 2% from 1st April 2008. However, the Cental Government has not issued any notification reducing the rate so far.
Therefore, till the notification is issued, the rate of CST will continue to be 3%.
It appears that the question of compensation of the loss to the State Governments on account of the reduction has not been resolved yet and the notification will be issued on after an agreement is reached between the Central and State Governments in this regard.