ACT No.28 of 2008

AN ACT FURTHER TO AMEND THE ANDHRA PRADESH VALUE ADDED TAX ACT, 2005

Be it enacted by the Legislature of the State of Andhra Pradesh in the Fifty-ninth Year of the Republic of India as follows:-

1. Short title, and commencement -

(1) This Act may be called as the Andhra Pradesh Value Added Tax (Second amendment)) Act, 2008

(2) (i) sections 2,3,4,6,7,8,9,10 and 11 shall come into force at once.

(ii) Sections 5, 12(iv) and 13 shall be deemed to have been come into force with effect on and from 1-6-2008.

(iii) sections 12 (ii) (a) and 14 (v) shall be deemed to have been come into force with effect on and from 1-4-2008.

(iv) sections 12(ii) (b) and 14 (vi) shall be deemed to have been come into force with effect on and from 1-8-2008.

(v) sections 12 (iii) and 14(i) shall be deemed to have been come into force with effect on and from 1-4-2005.

(vi) sections 12 (i), 14(ii), (iii), (iv) (vii), (viii), (ix) and (x) shall be deemed to have been come into force with effect on and from 1-7-2008.

2. Amendment of section 2.

In the Andhra Pradesh Value Added Tax Act, 2005, (hereinafter referred to as the principal Act), in section 2,-

(i) in sub-section (10), in clause (f), after the words" on behalf of any principal", the words "or principals", shall be added;

(ii) in sub-section (19), after the words "tax paid or payable under the Act by a VAT dealer", the words "whether directly by himself or through his agent on his behalf', shall be inserted;

(iii) in sub-section (22), after the words "tax paid or payable by a VAT dealer", the words "whether by himself or through his agent', shall be inserted;

(iv) after sub-section (30), the following sub-section shall be inserted, namely,-

"(30-A) 'SEZ' means Special Economic Zone as define under the Special Economic Zones Act, 2005 ( Central Act 28 of 2005)".

(v) for sub-section (39), the following shall be substituted, namely,-

"(39) "Total turnover' means the aggregate of sale prices of all goods, taxable and exempted, sold at all places of business of the dealer in the State, whether directly by himself for through his agent or agents, including the turnover of sales involved in the transactions falling under sections 3,5,6A and 8(6) of the Central Sales Tax Act, 1956 and shall also include the gross consideration received or receivable towards execution of works contract,"

3. Amendment of section 4.

In section 4 of the principal Act,-

(i) in sub-section (4), for the proviso there under, the following proviso shall be substituted, namely,-

"Provided that wherever a common input is used to produce goods, the turnover, taxable under this sub-section, shall be the value of the inputs, proportionate to the value of the goods, used or disposed of in the manner as prescribed under this section:

Provided further that in respect of purchase of goods specified in Schedules and VI, the VAT dealer shall be liable to pay tax at the rates specified for such goods in the respective Schedules.",

(ii) in sub-section (7), in clause (e), after the words "the value of such goods shall be excluded", the words "from the total turnover", shall be inserted:

(iii) after sub-section (9) and the provisos thereunder, the following sub-section shall be added, namely,-

"(10) (a) Notwithstanding anything contained in the Act or any other law for the time being in force, every person who, for an agreed commission brokerage, buys or sells on behalf of any principal who is a resident of the State shall be liable to tax under this Act at the rate or rates leviable threunder in respect of such purchase or sale, notwithstanding that such principal is not a dealer or that the turnover of purchase or sale relating to such principal is less than the minimum specified in sub-sections (2), (3) and (4) of section 17;

(b) The principal shall not be liable to tax on his turnover in respect of which the agent is liable to tax under clause (a) and the burden of proving that the turnover has been subjected to tax at the hands of his agent under the said clause shall be on such principal.".

4. Insertion of new section 7-A.

In the principal Act, after section 7, the following section shall be inserted, namely,-

7-A Exemption of Tax on sale of goods for certain purposes to an unit located in any Special Economic Zone.

Notwithstanding any thing contained in this Act, no tax under this Act shall be payable by any dealer in respect of sale of any goods made by such dealer to a registered dealer for the purpose of setting up operation, maintenance, manufacture, trading, production, processing, assembling, repairing, reconditioning, re-engineering, packaging or for use as packing material or packing accessories in an unit located in any Special Economic Zone or for development, operation and maintenance of Special Economic Zone by the developer of the Special Economic Zone, if such registered dealer has been authorised to establish such unit or to develop, operate and maintain such Special Economic Zone by the authority specified by the Central Government in this behalf.".

5. Amendment of section 8.

In section 8 of the principal Act, item (C) shall be deleted.

6. Amendment of Section 13.

In section 13 of the principal Act,

(i) in sub-section (5), after clause (e), the following clause shall be added, namely,-

"(f) the purchase of any goods by an agent for supply of such goods to his resident principal;"

(ii) after sub-section (5), the following sub-section shall be inserted, namely,-

"(5-A) Notwithstanding anything contained in sub-section (5), the resident principal, who receives the goods purchased on his behalf by his agent, is eligible to claim input tax credit on such goods subject to the possession of a declaration in the Form, as may be prescribed.".

7. Amendment of section 17.

In section 17 of the principal Act, in sub-section (5), in clause (e), for the words "on behalf of any non-resident principal", the words" on behalf of any principal or principals", shall be substituted.

8. Amendment of section 22.

In section 22 of the principal Act, after sub-section (3) and the proviso thereunder, the following sub-section shall be inserted, namely,-

"(3-A) Notwithstanding any thing contained in sub-section (3), in the case of a dealer, executing works contract for Government or Local Authority, wherever tax at the rate of 4% is added separately to the estimated value of the contract, such tax shall be collected by the contractee and remitted in the manner as may be prescribed."

9. Amendment of section 29.

After sub-section (1) of section 29 of the principal Act, the following proviso shall be added, namely,-

"Provided that in case of banks, the amount due to the defaulting dealer includes the amounts payable to the dealers by virtue of the overdraft facility.".

10. Amendment of section 38.

In section 38 of the principal Act,-

(i) in sub-section (1), in clause(a), the words " and sub-section (6) of section 8, shall be deleted;

(ii) after sub-section (8), the following sub-section shall be added, namely,-

"(9) The tax paid under the Act, by the person who is not liable to be registered as Value Added Tax or Turnover Tax dealer and not liable to pay tax under the Act, may be refunded in the manner as may be prescribed.".

11. Amendment of section 55.

In section 55 of the principal Act, after sub-section (3) and the proviso thereunder, the following sub-section shall be added, namely,-

"(4) (a) Any dealer, who purchases any goods by furnishing a declaration and uses such goods contrary to such declaration, shall be liable to pay a penalty of 200% of the tax leviable in the absence of such declaration on the value of such goods so purchase;

(b) any dealer, who claims that any sale of any goods is liable to tax at a reduced rate is found to be in possession of any false or fabricated declaration and pays tax at a reduced rate under the Act, shall be liable to pay a penalty of 200% of the tax leviable in the absence of such declaration on the value of the goods, so sold;

Provided that before levying penalty under this sub-section, the assessing authority shall give the dealer a reasonable opportunity of being heard.".

12. Amendment of Schedule-I

in the principal Act, in Schedule-I,-

(i) for entry at Sl.No.1, the following shall be substituted, namely,-

"1. Agricultural implements manually operated or animal driven, hand operated sprayers including knapsack/backpack power sprayers (powered upto 35 cc engines developing 0.8 to 1.4 HP), dusters and parts thereof;

(ii) (a) for entry 32, the following shall be substituted,namely,-

"Coconut and Tender Green Coconut".;

(b) for the entry 32, the following shall be substituted, namely,

"Coconut, Tender Green Coconut and Copra.".

(iii) for the entry at Sl.No.44, the following shall be substituted, namely,-

"44. Seeds for sowing and gardening purpose including the seed or grain corresponding to the seed sold to the nodal agencies, namely, Andhra Pradesh State Seeds Development Corporation (APSSDC), Andhra Pradesh State Co-operative Marketing Federation (Andhra Pradesh Markfed), Andhra Pradesh State Co-operative Oilseeds Growers Federation (OILFED), the Hyderabad Agricultural Co-operative Association Limited (HACA, National Seeds Corporation Limited and also including the seed or grain procured by the seed companies duly following the Seed Certification or Labelling Procedure.";

(iv) after entry 58, the following entries shall be added, namely,-

"59. Sale of goods to any unit located in Special Economic Zone;

59-A. All goods sold to units, operator, developer, Co-developer and Contractors engaged by them for use in processing area of the respective Special Economic Zones except the goods listed in rule 20(2) (a) of the Andhra Pradesh Value Added Tax Rules,2005'.

13. Amendment of Schedule-II.

In the principal Act, in Schedule-II, the entries 3 and 3A shall be omitted

14. Amendment of Schedule-IV.

In the principal Act, in Schedule-IV,-

(i) for the entry at Sl.No.2, the following shall be substituted, namely,-

"2. Goods of intangible or incorporeal nature as may be notified from time to time by the State Government and including,-

(i) Patents

(ii) Trade marks

(iii) Import licenses including exim scrips, special import licenses and duty free advance licenses

(iv) Export Permit or license or quota

(v) Software packages

(vi) Credit of Duty Entitlement Pass Book

(vii) Techinical know-how

(viii) Goodwill

(ix) Copyright

(x) Designs registered under the Designs Act, 1911

(xi) SIM cards used in Mobile Phones

(xii) Franchise, that is to say, an agreement by which the franchisee is granted representational right to sell or manufacture goods or to provide service or undertake any process identified or associated with the franchisor, whether or not a trade mark, service mark, trade name or logo or any symbol, as the case may be, is involved.

(ii) for entry at Sl.No.45, the following shall be substituted, namely,-

"45. Pipes of all varieties including G.I., C.I., PVC and Ductile pipes and fittings thereof but exluding RCC and PCC pipes and their fittings.";

(iii) for entry at Sl.No.46, the following shall be substituted, namely,-

"46. Moulded Plastic footwear and Hawai chappals and straps thereof;

(iv) for entry at Sl.No.47, the following shall be substituted, namely,-

"47. Diary, Calendar, Annual Reports, application Forms and similar printed material."

(v) entry 74 shall be omitted.

(vi) entry 75 shall be omitted.

(vii) in the entry at Sl.No.100,

(a) for the words, "industrial inputs, that is to say" the words "The following goods when sold as industrial inputs:" shall be substituted;

(b) in the table after sub-entry 231, the following sub-entries shall be added, namely,-

"232. Yeast of all kinds and forms.

233. Gel used for preparing bakery products and bread softner";

(viii) for entry at Sl.No.107, the following shall be substituted, namely,-

"107. (a) Preserved fruits, vegetables, meat, poultry, sea foods and fish sold in sealed containers or in a frozen state.

(b) Fruit jams, jelly, fruits squash, fruit juices and fruit drinks but excluding aerated fruit drinks;

(c) Cottage cheese (paneer), pickles, sauces, porridge, marmalade, honey,;

(ix) for entry at Sl.No.117, the following shall be substituted, namely,-

"117. Ayurvedic and Homeopathic products manufactured under license issued by the licensing authorities concerned under Drugs and Cosmetics Act, 1940.";

(x) after Note (5), the following Note shall be added, namely;

"Note:- (6) In order to claim reduced rate of tax of 4% under the entry 100, the dealer shall be in possession of a declaration in the Form, as may be prescribed, and issued by the dealer purchasing such commodities for the purpose of using them as Industrial Inputs."

T.MADAN MOHAN REDDY,

Secretary to Government,

Legislative Affairs & Justice,

Law Department