VAT in Andhra Pradesh: Rates, Eligibility, Registration Process & Fees

Value added tax or VAT is an indirect tax that is applicable to goods and services for each value added at every stage of production, procurement and distribution. In India, VAT was introduced on 1st April 2005. Under this taxation system, a final consumer pays the complete tax while purchasing goods.

In this context, all key highlights of VAT in Andhra Pradesh are explained, which is essential to understand before filing for one.

What Is Value Added Tax?

VAT originated in India with a prime intention to remove all complications of double taxation and cascading effects of previous sales tax structure on business. A VAT is levied on the sale of goods and services where a purchaser receives reimbursement of the tax paid at every stage of production. Under this tax, the amount added in every step is first assessed, and then tax is charged. As the end consumer is liable to pay the tax, VAT is called a consumption tax.

VAT in Andhra Pradesh came into existence in 2005 and operated under the Commercial Tax Department of AP. For an uninterrupted implementation of VAT across all states in India, different states have a separate governing body to look after this matter.

What Are the VAT Rates for Goods or Services in Andhra Pradesh?

In every state, VAT and other taxes are an integral part of the Government's earnings. In Andhra Pradesh, under Schedule I, commodities like agricultural instruments, fresh fruits, staples, maize, curd, books, vegetables, meat, etc., are exempted from VAT.

Here is the list of goods and services under different schedules applicable under VAT in Andhra Pradesh:

Schedules	Applicable Goods or Services	VAT Rates in Andhra Pradesh
Schedule III	Bullion, precious stones like diamonds, emeralds, ruby, etc. Jewellery and artificial pieces of jewellery made with precious metals, gold, etc.	1%
Schedule IV	Automatic or electrical agricultural equipment	5%
	Intangible goods like patents, trademarks, export permits or licences, goodwill, copyright, etc.
	Bricks, including refractory bricks, fly ash bricks, etc.
	All types of yarns and sewing thread
	Earthen tiles, excluding ceramic and glazed tiles
	Utensils, etc.
Schedule V	This tax rate is applicable to all goods which do not fall under Schedule I, II, III, & IV.	14.5% (Goods Taxable at Standard Rate)

There are commodities that attract the highest rate of VAT and fall under Schedule VI. In this case, the VAT rate in Andhra Pradesh ranges from 22.5% to 70%, with a prominent example being alcohol, petrol, tobacco and other aviation fuel.

Who Should Pay VAT in Andhra Pradesh?

As per the provision of the Andhra Pradesh VAT Act 2005, individuals involved in trade incurring an annual turnover of ₹ 40 lakhs must get them under VAT registration in Andhra Pradesh. These individuals will be registered under this ACT as VAT dealers and are liable to pay taxes accordingly.

How to Register for VAT in Andhra Pradesh Online?

The VAT registration in Andhra Pradesh is processed through the official website of the Commercial Tax Department of the state. This involves the following steps:

Step 1: Visit the official website of the Commercial Tax Department in Andhra Pradesh and click the registration tab.

Step 2: Add information and upload all required documents appropriately.

Step 3: A temporary VAT number will be generated.

Step 4: Upon completion of payment of the registration fee and necessary verification, a permanent VAT registration number will be generated.

Documents Required for VAT Registration

Incorporation Certificate of a company
Copy of Memorandum of Association or Article of Association
Particulars of the associate people in the business
Address proof or lease licence of the business
Company PAN card
Passport size photograph of the business owner
Copy of Partnership deed if it is a partnership firm
Rental agreement of the company, if applicable

There are some crucial credentials that one must keep while registering under VAT in Andhra Pradesh, like PAN number of the partnership firm, date of commencement of business, description of commodities, list of directors, details of authorised signatory, etc.

How to File a VAT Return Against VAT Payment in Andhra Pradesh?

The filling for VAT returns in Andhra Pradesh against payment is initiated now through the official website. Here are the steps mentioned below:

Step 1: Visit the same official portal of the Commercial Tax Department in the Government of Andhra Pradesh. Log on to the account with the appropriate credentials and select the correct e-filing option to continue with the procedure.

Step 2: Fill out the requisite return form VAT 200 online and submit the same to complete the process.

Using the same online website, an individual can make VAT payments in Andhra Pradesh. In this case, credentials like TIN/GRN will be required to successfully complete the E-payment.

How Is VAT Different From GST in Andhra Pradesh?

The introduction of VAT in Andhra Pradesh and in other states was not able to completely remove the effect of double taxation at each level of transaction in trade. For this reason, the implementation of Goods and Service Tax in India gained importance over VAT.

Goods and Services Taxes in India is an indirect tax and came into force on 1st July 2017. The primary objective of GST is to impose single indirect taxes throughout all states of India. To bring uniformity in the payment of taxes, the Central and State Government of India collects CGST (Central Goods and Services Tax) and SGST (State Goods and Services Tax) collectively.

Here are all the details about VAT in Andhra Pradesh. This context also highlights the other crucial details that will be beneficial for an individual to know while registering for VAT in Andhra Pradesh.

Frequently Asked Questions

✓ Who collects VAT on goods and services in Andhra Pradesh?

The Commercial Tax Department in Andhra Pradesh is the governing body of VAT in Andhra Pradesh and is responsible for collecting taxes on applicable goods and services.

✓ How to check the registration status of VAT in Andhra Pradesh?

One can check the status of registration of VAT through an official website of the Commercial Tax Department in Andhra Pradesh. Just enter the current date and e-registration reference number to check the status.

✓ What if the trader fails to register his business on time under VAT in Andhra Pradesh?

There is a penal fee of ₹ 5,000 that an individual is liable to pay post due date in case of registration failure in a given time. This amount of penalty depends on the nature of business and varies across states.

✓ What forms does one need to use to claim a refund on the VAT payment?

The forms used for claiming the refund on the amount paid on VAT are Form 510, 510A or 510B, whichever is applicable by the eligible individual.

✓ What are the products included in Schedule IV of the VAT in Andhra Pradesh?

The goods that fall under Schedule IV of the VAT in Andhra Pradesh and are charged 5% of taxes are SIM cards, patents, goodwill, coffee, pesticides, umbrellas, automatic agricultural equipment, etc.