With price rise consumers are burdened with more VAT hike in Andhra Pradesh. The Government of Andhra Pradesh increased VAT hike by 2 percent. VAT is already around 12.5 percent in Andhra Pradesh and traders feel that this would affect their business.

The new 14.5 percent VAT is applicable on various goods such as like cosmetics, electrical goods and appliances, automobile spares and some other goods. Traders feel that this would lead to more evasion of tax and corruption.

P Kameswara Sarma, president, The Vijayawada Electrical Dealers Association opposed the hike on VAT on electrical goods as some other states collects only 4 percent VAT on electronic goods and said that this would divert their business to other states particularly to Karnataka and Tamilnadu.

Traders want a roll back in the hike as it is very high and are now opposing the hike. As VAT has been imposed on cosmetic goods as well which has become essential these days, traders feel that it would be a burden on common man and the Government should reduce such tax.

When the Union Government is contemplating to bring Goods and Services Tax instead of VAT from the next financial year, this increase in VAT seems to be a hasty decision.

Traders will decide on further course of action in the Chamber of Commerce and Industries meeting which is going to be held on 19th January in Vijayawada.