Hyderabad: Telangana and Andhra Pradesh governments are in a dispute over sharing the liability of input tax credit (ITC) given to dealers in undivided AP.
This is the tax paid on purchase of goods that is normally set off from tax payable by him on sale of goods (output tax). In case input tax exceeds output tax in any month, it is carried forward in the subsequent month’s return.
The credit that is to be carried forward is the liability to the state, which has to be either refunded or adjusted against future taxes.
Delay of payment by Andhra Pradesh deliberate, complains Telangana
The input tax credit (ITC) liability was worked out to be nearly '550 crore at the time of bifurcation of AP in June 2014. Out of this, Telangana state's share was Rs 208 crore.
However, the entire ITC amount is lying with the AP government since June 2014 and the TS government has been trying to claim its share of '208 crore since then.
Following several rounds of talks held between Finance and Commercial Taxes officials of both states, an agreement was reached on the issue in November 2014.
AP had agreed to pay TS '100 crore immediately and the balance '108 crore in instalments. However, a year down the line, the AP government has failed to release any money.
The Telangana government lodged a strong complaint with AP Chief Secretary I.Y.R. Krishna Rao, accusing the AP Finance department of deliberately delaying the payment.
“We have taken up the issue of payment of '208 crore ITC with the AP government several times but there has been no response. There is also no response from the AP Finance department about payment of even '100 crore towards the first instalment," said V. Anil Kumar, commissioner of Telangana state Commercial Taxes department.
According to data available with the department, of the nearly 83,000 dealers who had availed ITC at the time of AP’s bifurcation, 52,000 were in Telangana state and the rest in Seemandhra.
