Andhra Pradesh government is fed up withe Central government not being interested in amending Andhra Pradesh Reorganization Act to correct the mistake in the commercial Taxes. A flawed clause in the bill made sure that traders have to pay their tax arrears to those governments under which their businesses are located.
But when the refunds of such taxes are being processed, the refunds are to be cleared by both the governments in population ratio. Since major businesses are present in Hyderabad, Telangana has got most of the tax arrears but then Andhra Pradesh government is paying refunds for the Taxes which it never received.
Andhra Pradesh government wants the center to amend the Act but Telangana government do not want that to happen. Fed up with center’s inaction, Andhra Pradesh government had decided to file a petition in Supreme court to get the issue resolved. Commercial tax arrears of nearly Rs 4000 crore was to be paid by traders in undivided AP at the time of bifurcation.