Vijayawada and Guntur are in the limelight for being the front runners in the race for the new capital of the residuary State of Andhra Pradesh, a fact that has sent several companies scouting for suitable warehouses on the city suburbs to set up a base to stock their products. The move is to avoid payment of dual taxes, both in Telangana and Andhra Pradesh.

Representatives of at least eight companies, including three pharmaceutical industries, met owners of warehouses recently to strike a business deal.

A few stockists have also visited the city to enquire about the availability of warehouses. Most of them are said to have requested for modern godowns with fencing on all sides.

Their demands include construction of a platform at the entrance of the godown with a height of over 5 feet for easy passage of heavy vehicles on the premises to unload or download stocks. The focus is also on structural stability of warehouses, as this region is prone to frequent floods.

The areas where these companies want to stock their products include Poranki, Autonagar, Ibrahimpatnam, Rayanapadu, Krishnalanka, N.K. Padu, Bhavanipuram, Gollapudi and Kanuru. “Companies are looking for godowns at reasonable prices. They want us to mediate and settle for a good deal,” says G. Raja from Jahanavi Rental Consultants.

Of the eight firms, three are negotiating with owners, who are charging a rent of Rs.10 to Rs.15 per sq.ft., he says.

The main reason for the rush to stock products in warehouses near Vijayawada is the need to reduce the burden of taxes both in Telangana and Seemandhra from June 2 when the two States formally come into existence.

“If a dealer from Telangana sells a product to a dealer in Vijayawada, the former has to pay Central Sales Tax, and the latter should also pay tax for selling the product locally. This will result in increase in the cost of the product. To avoid this, many stockists are searching for warehouses in Vijayawada by declaring that their principal place of business is in AP after submitting Form-F to the government. They can also transfer their Tax Identification Number (TIN),” says a senior official.

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