"States are likely to lose substantial revenues in the new regime," Madhya Pradesh Chief Minister Shivraj Chouhan wrote in a letter to Jaitley, adding that states' experience in receiving compensation for CST losses in the past was not very satisfactory.

"Unfortunately, article 268A has not been operationalized in the last 10 years. Kindly operationalize the Constitution (88th Amendment) Act and fulfill the promise made during the previous NDA regime till we have the required IT infrastructure to effectively deal with the complexities in the proposed GST regime," he wrote.

"Some states have been apprehensive about surrendering their taxation jurisdiction, others want to be adequately compensated. I do hope we are able to find a solution in the course of this year and approve the legislative scheme, which enables the introduction of GST," Jaitley had said in his maiden budget speech in the Lok Sabha last month.

On the design of GST, states are insisting that petroleum and alcohol be kept out of its purview . The Empowered Committee of state finance ministers has also demanded that the centre's share of GST should be made a part of the divisible pool between the centre and the states.

The finance minister has assured parliament that the government will seek to move the amendments to the constitution this year itself for implementing GST, besides already assuring states that he would clear their CST compensation dues of about 34,000 crore ($5.5 billion) over a three-year period.

States like Gujarat, Madhya Pradesh and Uttar Pradesh, which were earlier standing in the way of GST, have now said they are not opposed to it as long as their concerns are addressed.

Full implementation of GST could lift India's gross domestic product (GDP) growth by 0.9-1.7 percentage points, according to a study by the National Council of Applied Economic Research (NCAER).

Wednesday's meeting between the states and the centre, that will take the discussions on GST to the next level, will be the first after the presentation of the budget for 2014-15 in parliament.

Also Read:

Which Is The Best Tax-Exempt Instrument?

Sensex Hits New High Of 26,520.73; Nifty Breaches 7,900-Mark