HYDERABAD: In a major relief to the government of Telangana, the Centre has agreed to return Rs 1.257 million rupees which is attributed directly to the department of income tax account Telangana government for the payment of arrears of the former IT Andhra Pradesh Beverages Corporation Limited.
Coinciding with the argument presented by the government of Telangana that the department can not deduct the amount owed by a public sector undertaking of the funds from the state government, the Centre is committed to refund the amount of Telangana. The related file refund has been approved by the department of the Ministry of Finance of the Union of revenue and finance secretary.
“The file is now with the Finance Minister Arun Jaitley who promised to clean up in a day or two. After that it would take a few days to realize how much,” said a senior official in the finance department of the government of Telangana . With the sudden withdrawal of funds by the department in June this year, the finances of Telangana had suffered a blow.
In response to the withdrawal of funds, the state government despatched a delegation led by minister for panchayat raj and information technology KT Rama Rao to meet Jaitley in New Delhi and present the state’s case. KTR explained to Union finance ministry officials that the tax dues were related to erstwhile Andhra Pradesh and the sharing of assets and liabilities has not been completed between two states. Chief Secretary Rajiv Sharma, who was in the delegation, pointed out to the finance minister that the state government was not an income tax assesse and I-T department action was unwarranted.
“We also made it clear that if the Centre does not set the matter right, similar actions may affect GoI funds if any PSU falls behind in tax payments,” said a senior official in the state government.
Meanwhile, the Telangana government had also moved the Hyderabad High Court and received a stay on the notices issued by the I-T department. Sources in the state finance department said the court case actually forced the Centre to rethink on the issue and subsequently decide to return the money.
It was a year ago that the Income Tax department served notices to Andhra Pradesh Beverages Corporation in the then united Andhra Pradesh, seeking tax dues worth Rs 2,900 crore. After the bifurcation, the corporation was taken over by the Telangana government and the Centre was informed about the development. In June, RBI deducted Rs 1,257 crore from the Telangana government’s kitty and credited the amount in the account of the I-T department.
