Couple of days after Amazon announced the arrival of the biggest Fulfillment Center in the country in Telangana, Karnataka government warned the e-commerce giant that moving out of Kannada Land will be suicidal for the plans of the company. Amazon until now operates from Karnataka but there is a standoff between the company and the state over VAT exemption.
The company claims all its FCs are warehouses, where products are stocked, packed and dispatched and it was not doing business directly and so is not liable to pay VAT. Karnataka government has the exact opposite view.
The company suggests the government to collect VAT from sellers. CM Siddaramaiah might meet with Amazon India officials this month to smoothen the strained ties. Karnataka’s IT Minister S R Patil said,”Telangana is no competition to use. Amazon is not going to get any tax exemption in Telangana as that state has no money to pay salaries to its government employees”.
