Hyderabad: The seizure of distilleries by the Income-Tax department has triggered a fresh row between Telangana State and Andhra Pradesh. The Telangana government is unwilling to pay 50 per cent of the total Rs 9,000 crore income-tax arrears of undivided AP accrued over 10 years. It has made it clear that it is ready to pay only the arrears that have been accrued after the formation of TS in June 2014.

The AP government has been strongly opposing this, arguing that the I-T arrears pertain to the last 10 years from 2005 to 2015 and I-T was imposed on incomes earned in AP and Telangana during this period in the undivided state and both the states should share the arrears equally. The AP government said it cannot pay the entire amount.

“Telangana Beverages Corporation was formed only in July 2014. We are ready to pay I-T calculated from that month. Why should we pay I-T arrears that were accrued over the last 10 years when AP Beverages Corporation sold liquor and earned revenues?” asked Mr T. Padma Rao, minister for excise.

The Telangana government had conveyed the same to the AP. However, the AP government has been pointing out that when everything is being shared between AP and Telangana in the ratio of population (52:48), the same formula applies in this case too. AP has lodged a complaint with the Centre and Governor.

"We took up the issue with the governor and the Union Revenue secretary and sought an early solution to this problem. It is not fair to impose the entire I-T burden on the AP government. It is also not possible for the AP government to bear such a huge burden of Rs 9,000 crore on its own," said a senior official of APBCL. Excise officials of both states are expected to meet in a day or two to find a solution to the problem.