The state government has requested the Central government to set up a south-central zonal bench of Customs Excise Service Tax Appellate Tribunal (CESTAT) in Hyderabad.

In a letter to Union finance minister Pranab Mukherjee, IT minister Ponnala Lakshmaiah stated that the tribunal under Customs, Central Excise and Service tax laws for the states of Andhra Pradesh, Karnataka and Kerala is presently located in Bangalore although about 45 percent of the litigation pending before it is from Andhra Pradesh.

Most of the IT companies are registered as software technology park units or SEZs in AP, which are eligible for customs and central excise exemption. However, based on recent representations received from the industry representatives, most of the indirect tax exemptions, benefits available to the IT, ITes industry are rejected on trivial grounds and as such all the matters invariably reach CESTAT level, he said. Indirect tax litigation has touched new heights in AP, and is causing hardship to the industry, mainly the IT and ITeS sectors, as it requires personal representation before the zonal bench in Bangalore, the minister pointed out.

Hence, he requested Pranab Mukherjee to set up a south-central zonal bench of the tribunal in Hyderabad to aid in the effective and speedy delivery of justice.