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Telangana government takes revenge on RBI

Reserve Bank of India, the central bank of the country received a first of its kind Tax notice from Telangana. RBI currently has two mint compounds in Hyderabad – Lakdikapool and Chengicherla. Since coins are mint there, Telangana government says these are commercial establishments.

Telangana government served notices to RBI to pay 25 Crore per year as VAT and the sum totals to 200 Crore till date. This move of Telangana government is seen as a revenge on RBI for deducting 1200 Crore from the state account towards Income Tax arrears of Telangana Beverages Corporation. Telangana government back then toiled hard to recover the amount.

This move of the government came at the time when RBI’s application for VAT exemption for the mint compounds is pending with the state government. This application was put up by RBI in the United State when the Kiran Kumar Reddy was the Chief Minister. But a decision was pending on that since then.