The Telangana State government has reportedly served a notice on the Reserve Bank of India, demanding that Rs 200 crore VAT arrears right from 2005 to 2012. This corresponds to the production of currency coins in t mint compounds of Saifabad and Cherlapally in Hyderabad.
This is reportedly being seen as a tit-for-tat action by the Telangana government which was in response the RBI deducting around Rs 1,247 crore from the official Telangana government’s treasury account in May 2015 towards the payment of I-T arrears.
Kiran Kumar Reddy government in the year 2012
The RBI had reportedly secured an exemption from VAT payment from the Kiran Kumar Reddy government in the year 2012. But the Telangana government is now planning to recover the arrears. The Union finance ministry buys metals which are used for coins and supplies to RBI for minting coins.
The YSR government had then treated this as a form of commercial transaction between the Centre and the RBI while it also imposed a 5 per cent VAT from the years 2005 to 2012. No VAT was been collected by any state government from their mint compounds and now RBI is negotiating with TS government!
