A flawed Bifurcation act is costing big for Andhra Pradesh. Section – 50,51,56 in Andhra Pradesh Reorganization Act were to divide the commercial taxes between both the states. According to Section – 50,51, Commercial taxes will go to that state in which the registered office and assignment area belongs to.
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But according to Section-56, when the taxes will have to be refund, the tax amount will be paid by both the states according to population ration. In this case, majority companies present in Hyderabad will pay their taxes to Telangana but when they claim refund, AP will have to pay back 52% of that.
Which means AP is refunding money which it never got. So AP had written to Center to correct Section-50.51. AP had lost 3820.36 Crore due to these flaws. Major AP industries like Navayuga and Krishnapatnam Port have paid their taxes to Telangana, even though they totally operate in AP.
