Few sections in the Andhra Pradesh Reorganization Act have cost the truncated state as much as 4000 Crore and the state government is seeking legal advice regarding how to approach the courts on this issue. Under Sections 50 and 51, the right to recover tax or duty on property belongs to the state in which the property is located and Section 56 mentions that the refund on tax or duty will be borne by both the states in population ratio.
For a big dealer registered in Hyderabad but have operations in entire undivided state, the tax will only go to Telangana. But when the company applies for a refund, AP will have to repay some part of it despite not getting any initial tax.
The state government had estimated this loss to be at 4000 Crore. They now demand that the taxes before the appointed day should be divided on population basis but not on geographical location. The state government already took this issue with the Center but of no use.
