Telangana government is trying to make cash out of the e-commerce firms which operate in Hyderabad by imposing VAT on products they sell here. Online business do not pay up taxes to Telangana despite making sales here. Also due to the cheap rates they sell, purchasers do not opt for sales in shops and shopping malls which duly pay their taxes to the government. In either way, the state is losing due to online sales.
So, Telangana government is mulling the idea of imposing VAT for e-commerce firms just like the neighbouring Karnataka state. However taking this crisis as an opportunity, Andhra Pradesh Chief Minister Chandrababu Naidu’s team is in talks with e-commerce giant, Amazon to shift its warehouses and operations to the state and promised to give them VAT exemption for certain period of time.
Imposing VAT means products online will become costlier and will adversely affect the business of e-commerce retailers, so Amazon and other firms are seriously considering Naidu’s proposals.
