Chapter I PRELIMINARY

This Act may be called the Andhra Pradesh Value Added Tax Act, 2005.

1. (2) It extends to the whole of the state of Andhra Pradesh.
2. (3) a) Sections 1,2,17,18 and 78 shall be deemed to have come into force with effect from 31st January, 2005 and b) The remaining provisions shall come into force on such date as the

Definitions In this Act, unless the context otherwise requires—

1. (1) ‘Additional Commissioner’ means any person appointed to be an Additional Commissioner of Commercial Taxes under Section 3-A;
2. (2) ‘Appellate Deputy Commissioner’ means any person appointed under Section 3-A to be an Appellate Deputy Commissioner or any other officer not below the rank of Deputy Commissioner authorized by the Commissioner to be an Appellate Deputy Commissioner;
3. (3) ‘Appellate Tribunal’ means the Appellate Tribunal appointed under Section 3;
4. (4) ‘Assessing authority’ means any officer of the Commercial Taxes Department authorized by the Commissioner to make any assessment in such area or areas or the whole of the State of Andhra Pradesh;
5. (5) ‘Assistant Commissioner’ means any person appointed to be an Assistant Commissioner of Commercial Taxes under Section 3-A;
6. (6) ‘Business’ includes:
   • (a) any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture whether or not such trade, commerce, manufacture, adventure or concern is carried on or undertaken with a motive to make gain or profit and whether or not any gain or profit accrues there from;
   • (b) any transaction in connection with, or incidental or ancillary to, such trade, commerce, manufacture, adventure or concern; and
   • (c) any transaction in connection with commencement or incidental or ancillary to the commencement or closure of such trade, commerce, manufacture, adventure or concern; Explanation: - For the purpose of this clause —
     • (i) the activities of raising of manmade forests or rearing of seedlings or plants shall be deemed to be business;
     • (ii) any transaction of sale or purchase of capital goods pertaining to such trade, commerce manufacture, adventure or concern shall be deemed to be business;
     • (iii) a sale by a person whether by himself or through an agent of agricultural or horticultural produce grown by himself or grown on any land whether as owner or tenant in a form not different from the one in which it was produced, save mere cleaning, grading or sorting does not constitute business;
7. (7) ‘Casual trader’ means a person who, whether as principal, agent or in any other capacity, carries on occasional transactions of a business nature involving the buying, selling, or distribution of goods in the State, whether for cash or for deferred payment, or for commission, remuneration or other valuable consideration;
8. (8) ‘Commissioner’ means any person appointed by the Government to be the Commissioner of Commercial Taxes under Section 3-A;
9. (9) ‘Commercial Tax Officer’ means any person appointed to be Commercial Tax Officer under Section 3-A;
10. (10) ‘Dealer’ means any person who carries on the business of buying, selling, supplying or distributing goods or delivering goods on hire purchase or on any system of payment by instalments, or carries on or executes any works contract involving supply or use of material directly or otherwise, whether for cash or for deferred payment, or for commission, remuneration or other valuable consideration, and includes:
    • (a) a company, a Hindu undivided family or any society including a co- operative society, club, firm or association which carries on such business;
    • (b) a society including a co-operative society, club, firm or association which buys goods from, or sells, supplies or distributes goods to its members;
    • (c) a casual trader, as herein before defined;
    • (d) any person, who may, in the course of business of running a restaurant or an eating house or a hotel by whatever name called, sells or supplies by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink whether or not intoxicating;
    • (e) any person, who may transfer the right to the use of any goods for any purpose whatsoever whether or not for a specified period in the course of business to any other person;
    • (f) a commission agent, a broker, a delcredere agent, an auctioneer or any other mercantile agent, by whatever name called, who carries on the business of buying, selling, supplying or distributing goods on behalf of any principal; Explanation I: Every person who acts as an ‘agent of a non-resident dealer’, that is, as an agent on behalf of a dealer residing outside the State, and buys, sells, supplies or distributes goods in the State or acts on behalf of such dealer as:-
      • (i) a mercantile agent as defined in the Sale of Goods Act, 1930; or
      • (ii) an agent for handling goods or documents of title relating to goods; or
      • (iii) an agent for the collection or the payment of the sale price of goods or as a guarantor for such collection or payment and every local branch of a firm or company situated outside the State; shall be deemed to be a dealer for the purpose of the Act; Explanation II: Where a grower of agricultural or horticultural produce sells such produce grown by himself on any land in which he has an interest whether as owner, usufructuary mortgagee, tenant or otherwise, in a form different from the one in which it was produced after subjecting it to any physical, chemical or any process other than mere cleaning, grading or sorting, he shall be deemed to be a dealer for the purpose of the Act; Explanation III: The Central Government or the State Government which, whether or not in the course of business, buys, sells, supplies or distributes goods, directly or otherwise, for cash or for deferred payment or for commission, remuneration or other valuable consideration shall be deemed to be a dealer for the purposes of the Act; Explanation IV: Each of the following persons and bodies, whether or not in the course of business, who sells or disposes of any goods including unclaimed or confiscated or unserviceable goods or scrap, surplus, old, obsolete, or discarded material or waste products whether by auction or otherwise, directly or through an agent for cash, or for deferred payment or for any other valuable consideration shall be deemed to be a dealer to the extent of such disposals or sales, namely:-
      • (i) Port Trust;
      • (ii) Municipal Corporations, Municipal Councils, and other local authorities;
      • (iii) Railway authorities;
      • (iv) Shipping, transport and construction companies;
      • (v) Air transport companies and air-lines including National Airport Authority;
      • (vi) Transporters holding permits for transport vehicles granted under the Motor Vehicles Act, 1988 which are used or adopted to be used for hire;
      • (vii) Andhra Pradesh State Road Transport Corporation;
      • (viii) Customs Department of the Government of India administering the Customs Act, 1962;
      • (ix) Insurance and financial corporations or companies and Banks included in the Second Schedule to the Reserve Bank of India Act, 1934;
      • (x) Advertising agencies;
      • (xi) Any other Corporation, company, body or authority owned or set up by or subject to administrative control of the Central Government or any State Government; Explanation V: Save as otherwise expressly provided for under the Act, the word ‘dealer’ shall include a VAT dealer and a TOT dealer.
11. (11) ‘Deputy Commercial Tax Officer’ means any person appointed to be a Deputy Commercial Tax Officer under Section 3-A;
12. (12) ‘Deputy Commissioner’ means any person appointed to be a Deputy Commissioner of Commercial Taxes under Section 3-A;
13. (13) ‘Exempt sale’ means a sale of goods on which no tax is chargeable, and consequently no credit for input tax related to that sale is allowable;
14. (14) ‘Exempted Turnover’ means the aggregate of sale prices of all goods exempted under the Act and full or part of the actual value or fair market value of all transactions not taxable under the provisions of the Act, including transactions falling under Section 6A of the “Central Sales Tax Act, 1956;”
15. (15) ‘Fair market value’ means the price that the goods would ordinarily fetch on sale in the open market on the date of sale or dispatch or transfer of such goods;
16. (16) ‘Goods’ means all kinds of movable property other than newspapers, actionable claims, stocks, shares and securities, and includes all materials, articles and commodities including the goods as goods or in some other form, involved in the execution of a works contract or those goods used or to be used in the construction, fitting out, improvement or repair of movable or immovable property and also includes all growing crops, grass and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale;
17. (17) ‘Goods vehicle’ means any motor vehicle constructed or adapted for the carriage of goods, or any other motor vehicle not so constructed or adapted when used for the carriage of goods solely or in addition to passengers and also includes every wheeled conveyance;
18. (18) ‘Government’ means the State Government of Andhra Pradesh.;
19. (19) ‘Input tax’ means the tax paid or payable under the Act by a VAT dealer to another VAT dealer on the purchase of goods in the course of business;
20. (20) ‘Joint Commissioner’ means any person appointed to be a Joint Commissioner of Commercial Taxes under Section 3-A;
21. (21) ‘Notification’ means a notification published in the Andhra Pradesh Gazette and the word ‘notified’ shall be construed accordingly;
22. (22) ‘Output tax’ means the tax paid or payable by a VAT dealer on the sale of goods to another VAT dealer or any other person;
23. (23) ‘Place of business’ means any place where a dealer purchases or sells goods and includes:
    • (a) any warehouse, godown or other place where goods are stored or processed or produced or manufactured; or
    • (b) any place where a dealer keeps his books of accounts; or
    • (c) any place where business is carried on through an agent by whatever name called, the place of business of such agent;
24. (24) ‘Prescribed’ means prescribed by the Rules made under the Act;
25. (25) ‘Purchase Price’ means the amount of valuable consideration paid or payable by a person for any purchase made including any sum charged for anything done by the seller in respect of the goods at the time of or before delivery thereof; Explanation I: - Where the purchase is effected by way of transfer of property in goods (whether as goods or in some other form) involved in the execution of works contract, purchase price shall mean the total consideration for the works contract; and for the purpose of levy of tax, purchase price shall be taken to mean the price as may be determined in accordance with the rules, by making such deductions from the total consideration for the works contract as may be prescribed; Explanation II: - The amount of duties levied or leviable on the goods under the Central Excise Act, 1944, or the Customs Act, 1962 shall be deemed to be part of the purchase price of such goods, whether such duties are paid or payable by or on behalf of the seller or the purchaser or any other person; Explanation III: - Purchase price shall not include tax paid or payable by a person in respect of such purchase;
26. (26) ‘Return’ means any return required to be furnished under the Act or the Rules made thereunder;
27. (27) ‘Rules’ means rules made under the Act;
28. (28) ‘Sale’ with all its grammatical variations and cognate expressions means every transfer of the property in goods (whether as such goods or in any other form in pursuance of a contract or otherwise) by one person to another in the course of trade or business, for cash, or for deferred payment, or for any other valuable consideration or in the supply or distribution of goods by a society (including a co-operative society), club, firm or association to its members, but does not include a mortgage, hypothecation or pledge of, or a charge on goods. Explanation I :- A delivery of goods on the hire purchase or any system of payment by instalments shall, notwithstanding the fact that the seller retains the title in the goods, as security for payment of the price, be deemed to be a sale. Explanation II :-
    • (a) Notwithstanding anything contained in the Indian Sale of Goods Act, 1930 a sale or purchase of goods shall be deemed, for the purpose of the Act to have taken place in the State, wherever the contract of sale or purchase might have been made, if the goods are within the State.
      • (i) in the case of specific or ascertained goods, at the time the contract of sale or purchase is made; and
      • (ii) in the case of unascertained or future goods, at the time of their appropriation to the contract of sale or purchase by the seller or by the purchaser, whether the assent of the other party is prior or subsequent to such appropriation.
    • (b) Whether there is a single contract of sale or purchase of goods situated at more places than one, the provisions of Clause
    • (a) shall apply as if there were separate contracts in respect of the goods at each of such places. Explanation III:- Notwithstanding anything contained in the Act or in the Indian Sale of Goods Act, 1930 two independent sales or purchases shall for the purposes of the Act, be deemed to have taken place.
29. (1) When the goods are transferred from a principal to his selling agent and from the selling agent to his purchaser, or
30. (2) When the goods are transferred from the seller to a buying agent and from the buying agent to his principal, if the agent is found in either of the cases aforesaid.
    • (i) to have sold the goods at one rate and to have passed on the sale proceeds to his principal at another rate; or
    • (ii) to have purchased the goods at one rate and to have passed them on to his principal at another rate; or
    • (iii) not to have accounted to his principal for the entire collections or deductions made by him, in the sales or purchases effected by him on behalf of his principal; or
    • (iv) to have acted for a fictitious or non-existent principal. Explanation IV:- A transfer of right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration shall be deemed to be a sale. Explanation V:- Notwithstanding anything contained in the Act or in the Indian Sale of Goods Act, 1930 the sale of goods includes the supply, by way of or as part of any service or in any manner whatsoever, of goods, being food or other article for human consumption or any drink (whether or not intoxicating) where such supply or service, is for cash, deferred payment or other valuable consideration and such supply of any goods shall be deemed to be a sale of those goods by the person making the supply of those goods to the person to whom such supply is made. Explanation VI :- Whenever any goods are supplied or used in the execution of a works contract, there shall be deemed to be a transfer of property in such goods, whether or not the value of the goods so supplied or used in the course of execution of such works contract is shown separately and whether or not the value of such goods or material can be separated from the contract for the service and the work done. Explanation VII :- Notwithstanding anything contained in the Indian Sale of Goods Act, 1930 a sale or purchase of goods shall, for the purposes of the Act be deemed to have taken place where in the course of any scheme whether called as “Lucky Gift Scheme” or by any other name, any goods are transferred by the person who runs such scheme to any other person who is a subscriber to that scheme, provided that all the subscribers to the scheme have agreed to contribute a specific sum periodically or otherwise, towards the cost of any article agreed to be sold or given to the winner of the draw held by the holder of the scheme; and the turnover for the purpose of this explanation shall be the amount which would have been payable by the subscriber had he not won the prize till the end of the series of draw; Explanation VIII:- Every transfer of property in goods by the Central Government or the State Government for cash or for deferred payment or for any other valuable consideration, whether or not in the course of business shall be deemed to be a sale for the purpose of the Act;
31. (29) ‘Sale Price’ means :-
    • (a) the total amount set out in the tax invoice or bill of sale; or
    • (b) the total amount of consideration for the sale or purchase of goods as may be determined by the assessing authority, if the tax invoice or bill of sale does not set out correctly the amount for which the goods are sold; or
    • (c) if there is no tax invoice or bill of sale, the total amount charged as the consideration for the sale or purchase of goods by a VAT dealer or TOT dealer either directly or through another, on his own account or on account of others, whether such consideration be cash, deferred payment or any other thing of value and shall include:
      • (i) the value of any goods as determined by the assessing authority:
    • (a) to have been used or supplied by the dealer in the course of execution of the works contract; or
    • (b) to have been delivered by the dealer on hire purchase or any other system of payment by instalments; or
    • (c) to have been supplied or distributed by a society including a Co- operative Society, Club, firm or association to its members, where the cost of such goods is not separately shown or indicated by the dealer and where the cost of such goods is separately shown or indicated by the dealer, the cost of such goods as shown or indicated;
      • (ii) any other sum charged by the dealer for anything done in respect of goods sold at the time of, or before, the delivery of the goods;
      • (iii) any other sum charged by the dealer, whatever be the description, name or object thereof; Explanation-I – Subject to such conditions and restrictions, if any, as may be prescribed in this behalf, any cash or other discount on the price allowed in respect of any sale and any amount refunded in respect of articles returned by customers shall not be included in the sale price; Explanation-II – For the purpose of determination of sale price and levy of Value Added Tax, the Value Added Tax charged or chargeable shall not form part of Sale Price;
32. (30) ‘Schedule’ means a Schedule appended to the Act;
33. (31) ‘Special Rate of Tax’ means the rates of tax specified in Schedule - VI;
34. (32) ‘State’ means the State of Andhra Pradesh;
35. (33) ‘State Representative’ means an officer of the Commercial Taxes Department not below the rank of Assistant Commissioner appointed by the State Government to receive on their behalf notices issued by the Appellate Tribunal and generally to appear, act and plead on their behalf in all proceedings before the Appellate Tribunal and includes an officer authorized to act on his behalf in his absence;
36. (34) ‘Tax’ means a tax on the sale or purchase of goods payable under the Act and includes: a) a tax on the transfer, otherwise than in pursuance of a contract, of property in any goods for cash, deferred payment or other valuable consideration; b) a tax on the transfer of property in goods whether as goods or in some other form involved in the execution of a works contract; c) a tax on the delivery of goods on hire purchase or any system of payment by instalments; d) a tax on the transfer of the right to use any goods for any purpose whether or not for a specified period for cash, deferred payment or other valuable consideration; e) a tax on the supply of goods by any un-incorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration; f) a tax on the supply, by way of or as part of any service or in any other manner whatsoever of goods, being food or any other article for human consumption or any drink whether or not intoxicating, where such supply or service is for cash, deferred payment or other valuable consideration;
37. (35) ‘Tax invoice’ means a sale invoice containing such details as may be prescribed and issued by a VAT dealer to another VAT dealer;
38. (36) ‘Tax period’ means a calendar month or any other period as may be prescribed;
39. (37) ‘Taxable Sale’ means a sale of goods taxable under the Act and under the Central Sales Tax Act, 1956 and shall include sale of any goods exported outside the territory of India or sold in the course of export;
40. (38) Taxable turnover’ means the aggregate of sale prices of all taxable goods; Explanation-I: For the purpose of a VAT dealer, it shall not include the amount of VAT paid or payable, but shall include the sale price of zero-rated sales; EXPLANATION-II: THE SALE PRICE RELATING TO SECOND AND SUBSEQUENT SALE OF GOODS SPECIFIED IN SCHEDULE VI SHALL NOT FORM PART OF TAXABLE TURNOVER;
41. (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, including transactions falling under Section 8 of the Act and under Section 6A of the Central Sales Tax Act, 1956 and shall also include the gross consideration received or receivable towards execution of works contract;
42. (40) ‘Turnover tax’ or TOT means a tax on the taxable turnover of dealers registered or liable to be registered for TOT;
43. (41) ‘Turnover Tax Dealer’ or TOT dealer means any dealer who is registered or liable to be registered for TOT;
44. (42) ‘VAT’ means Value Added Tax on sales, levied under the provisions of the Act;
45. (43) ‘VAT dealer’ means a dealer who is registered for VAT;
46. (44) ‘Vessel’ includes any ship, barge, boat, raft, timber, bamboos or floating materials propelled in any manner;
47. (45) ‘Works Contract’ includes any agreement for carrying out for cash or for deferred payment or for any other valuable consideration, the building construction, manufacture, processing, fabrication, erection, installation, laying, fitting out, improvement, modification, repair or commissioning of any movable or immovable property;
48. (46) ‘Year’ means the twelve-month period ending on the thirty first day of March;
49. (47) ‘Zero rated sales’ for the purpose of the Act, means a sale of goods in the course of inter-State trade or commerce, exports to outside the territory of India including sales in the course of export and sale of goods to any unit located in Special Economic Zone as may be notified.