Telangana seeks relief on income tax

The Telangana government faced a severe financial crisis early this year after the I-T department collected Rs 1,200 crore as arrears of Telangana's share of AP Breweries Corporation Ltd's I-T dues.

The government had to struggle for over four months with the Union finance ministry, RBI and the I-T department to reclaim the deducted amount.

Meanwhile, the I-T department issued notices to other corporations like HMDA, Rajiv Swagruha Corporation etc. seeking payment of I-T amounting to over Rs 500 crore.

Mr Rajender told Mr Jaitely that these corporations were set up not for commercial purposes but for providing housing and infrastructure for people and for implementing welfare schemes for the poor and sought I-T exemption.

Mr Rajender also urged the Centre to raise the FRBM borrowing limit from 3 per cent to 3.5 per cent of GSDP besides payment of '3,500 Central Sales Tax (CST) arrears of previous years.

The TS government representative in New Delhi, Mr S. Venugopala Chary said, "Despite being revenue-surplus, the Centre is delaying raising FRBM limit to 3.5 per cent. We sought relaxation at the earliest since less than four months are left for the financial year to end and the government can mobilise Rs 16,000 crore to take up projects."

Mr Chary said TS was not getting adequate funds from the Centre as

recommended by the 13th Finance Commission.