Panel against Levy of Central Sales Tax on Telangana-Seemandhra Trade

Express News Service
Hyderabad, March 13:
   Whether it will be a free-trade zone or sales taxes will be levied on inter-state trade and commerce post division of the State. As it is the Central Sales Tax (CST) will be applicable to both Telangana and Andhra Pradesh post division of the State.
 However, the sub-committee on "Resource Mobilisation" recommends not to levy CST on goods transported from Telangana to Andhra Pradesh and vice versa. This is because if the CST is levied, then the prices of the goods will go up and it will be a burden on the people of the both the states.
"We recommend not levy CST on inter-state trade and commerce. But, the chief ministers of both the states sit together and take a decision on the matter post division of the state," an official said.
 For example, the manufacture of the liquor is high in Telangana and the consumption is high in Seemandhra, because of the high density of the population.
 "Once the liquor is manufactured and trasnported to Andhra Pradesh post division, then CST will be levied in Telangana and VAT will be collected in Andhra Pradesh," explained an officer. The CST is two percent now. It means that the CST and VAT will increase the end price of the goods. This will applicable to all goods transported between the two sates.
 "The Chief Ministers of both the states should declare a holiday for some period on collecting taxes on inter-state trade," officers are likely to recommend.
 However, the sharing of revenue between the two states will not be a problem. The motor vehicle tax, land registration, excise will be collected in their respective areas. There will be no problem for vehicles paid life tax. As far as the commercial vehicles are they have to pay quarterly tax. If the vehicle is registered in one region and operating in other region, the collection of quarterly tax will become a problem. "We are working out the modalities for this," sources said.

AUGMENT OF REVENUES: The officials are also suggesting the means to augment the revenues of both Telangana and Andhra Pradesh states. After the division, both the states need more money for construction or reconstruction of the respective states. "We cannot increase the excise revenue. As the State is getting highest revenue. Any increase in the excise duty, it will lead to illicit liquor trade," sources explained. The best means is that to improve the mining revenue. "Around 700 per cent to 1,000 per cent increase in mining revenue is possible in both the states. Due to the current mining policy, the government is getting only hundreds of crores rupees and the contractors are earning thousands of crores. The changes in mining policy will fetch more revenue for both the states," the sources explained.


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