Hyderabad: Inter-state trade attracts central sales tax (CST), which is collected on the inter-state movement of goods.
Prior to June 2, trade in the united state had attracted only value-added tax (VAT). However, with the bifurcation, CST came into picture between Telangana and AP on movement of goods.
This has resulted in at least two per cent increase in prices of all commodities.
As traders try to protect their existing margins, the additional tax burden is being passed on to consumers leading to escalation of prices.
The sub-committee on resource mobilisation headed by former IAS officer Asuthosh Mishra had recommends that no CST be levied on goods transported from Telangana to Andhra Pradesh and vice versa.
However, with both the CMs already at loggerheads on various issues such as Polavaram, Krishna water, PPAs, fee reimbursement etc., officials doubt that a meeting between the two will be possibility in near future.
Telangana finance minister Etela Rajendar said, “Normally, trade between two states is viewed as inter-state trade and it automatically attracts taxes like CST.
If we want to do away with CST, both states have to arrive at a consensus to allow free movement of goods.
The Centre too needs to exempt both the states from CST. We are open to talk with AP.”
From AP to Telangana: Major goods and commodities transported from AP to Telangana are fertilisers, pesticides, petrol, diesel, natural gas, cashew nut, sand.
From Telangana to AP: Major goods and commodities transported from Telangana to AP: Liquor, cement, cotton, and flour.
