Hyderabad: The governments of both Telangana and AP who are keen to know the revenue figures of their respective states are in a fix as the decision on input tax credit (ITC) available to over 87,000 traders in the combined state has not been taken.
Meanwhile the deadline for traders to pay the tax for June, July 20, is already over. ITC is the amount of tax paid by the dealer on purchases for which the dealer is entitled to claim credit. The total accumulated credit liability available to traders as on June 1, 2014 is Rs 1,330.73 crore.
As per the AP Reorganisation Act the liability of AP works out to Rs 776.08 crore (58.32 per cent) and for Telangana it is Rs 554.65 crore (41.68 per cent). But, the hitch is how the governments return the credit availability to traders of both the states.
The deadline for dealers to make payments is the 20th of every month, while the decision has not been taken yet. The governments are supposed to take a decision on disbursement of credit to traders by July 31 which is the last date of the grace period for traders to pay taxes.
“If the decision is not taken in the above period then the first revenue figures of both the states will get distorted. And, in the following month the revenue will show a drastic fall,” said a senior official of the AP Commercial Tax department. If both the states have to meet their respective liabilities, an inter-state transfer of funds, as per the AP State Re-organisation Act, may be required, officials said.
Telangana commercial tax officials are also working on proposals to reduce the undue liability of the state by allowing 47,342 dealers of AP, who have sought registration only in the state of AP to avail themselves of ITC worth Rs 536.22 crore in AP itself. And, 39,139 dealers of Telangana may be allowed to avail themselves of ITC worth Rs 589.35 crore in Telangana itself.
Meanwhile, 609 common dealers in both the states, who sought registration in both the state avail ITC of Rs 180.60 crore entirely in the state of AP. However, this proposal has to be worked out with the concurrence of the government of AP which has not yet taken place.
It can be noted that the commercial taxes paid by traders or dealers in the form of VAT, EST etc., are the highest revenue generator for the government, and in united Andhra Pradesh it used to contribute 68 per cent of the state's revenue. The commercial taxes do not include revenue generated from stamps and registration, excise and others.
