Patna, June 24: Bihar deputy chief minister Sushil Kumar Modi has urged Union finance minister Pranab Mukherjee to resolve the payment of Central Sales Tax compensation issue before he demits office to contest the presidential election.

Modi, who is also the state finance minister, has said the delay in resolving the issue might create difficulties in implementing Goods and Services Tax (GST).

The Central Sales Tax has been slashed from 4 per cent to 2 per cent. Less central taxes mean less share of the tax to the state.

Modi added that at the time Central Sales Tax was slashed, the states were assured that the Centre would compensate them for the losses.

“The states incurred a loss of Rs 19,000 crore in the financial year 2010-11. It also incurred losses in 2011-12 and the current financial year. The Centre has not given any indication about compensating the states,” Modi said.

Modi added that not compensating the states is creating hurdles in implementing the GST in the country.

“As you are kindly aware that the issue of payment of Central Sales Tax compensation has still not been resolved, in case, this issue remains unresolved any longer, it may affect the implementation of GST. Since you have kindly done so much for the implementation of GST, I shall be extremely grateful if you kindly resolve this issue at the earliest,” Modi stated in his letter.

Modi, while thanking Mukherjee, for the initiatives taken by him for the introduction of GST in the country, stressed that they were on the right track.

“The parliamentary standing committee on finance has taken up the discussions on the issue. The representatives of the government of India, Asim K. Dasgupta, the former chairman of the empowered committee, myself and a few federations of industry and commerce, have given evidence before the committee. I understand that the committee is likely to give its report in the monsoon session of Parliament,” Modi stated.