Telangana Government is in dearth of financial assistance to implement welfare and development schemes in the state. Telangana has surplus budget just for this FY and it seems the revenue for the state can’t be generated after the division of the state. Telangana officials had noticed that significant drop in VAT collections since last 6 months. There are many reasons that observed for reduction of the revenue through VAT.
In addition to division of the state, a surge in e-commerce transactions that were evading VAT payments. People in Hyderabad were habituated for online shopping in websites like Flipcart and Sanpdeal. They offered the products and commodities with subsidies to attract the customers. This online business cleverly evaded VAT. Officers said that the reason behind the move to levy tax is to bolster tax revenues.
Telangana Government has planned to sell its lands in Hyderabad and Ranga Reddy to get more income. The move can’t digest to the biggies like Amazon, Flipcart and others. The companies believe that this VAT could adversely affect their operations to sustain. AP Chief Minister CBN is in talks with Amazon officials to shift the base to AP from Hyderabad. If AP is granted Special Status, Amazon is the first e-commerce company to move to AP.
