Hyderabad: The Andhra Pradesh government is losing around Rs 3,800 crore due to Andhra Pradesh State Reorganisation Act providing for apportionment of assets based on geographical location, while the liabilities are apportioned based on population ratio of AP and Telangana.
AP Chief Minister N. Chandrababu Naidu wrote a letter to the Centre to modify the Sections to provide equal sharing of revenues, realisable from the collection of arrears taxes. Home ministry, agreeing with the AP government’s argument, has said that after taking the view of both states, it will make changes in the Act.
Mr Naidu in his letter said that the AP Reorganisation Act is riddled with anomalies, contradictions and inconsistencies and it has not applied principles uniformly and failed to apply the norms of equity and fairness. Section 50 of the AP Act allows right to recover arrears taxes or duty on property including arrears of land revenue to the successor state in which the property is situated. At the same time, Section 56 of the Act says the liability of the existing state of AP to refund any tax or duty on property, including land revenue, shall be apportioned between the successor states of AP and Telangana on the basis of population ratio.
Mr Naidu wrote that “Hyderabad was the principal place of assessment for taxes and duties, including that of oil marketing companies and the Beverages Corporation, which together contributed nearly 45 per cent of the VAT to united AP, and the provision in the State Reorganisation Act would deprive the residuary state of its share in tax arrears amounting to hundreds of crores.”
