Commercial Taxes Department

Brief History

1.1   The Andhra State comprising parts of the erstwhile Madras province was constituted on October 1st 1953. The Madras General Sales Tax Act, 1939 was made applicable to the New State. The Salient Features of the said scheme were
a. Multi point sales tax on all commodities with a minimum turn over of Rs. 10,000/-
b. An additional ingle point tax on certain luxury items like motor vehicles refrigerators etc.
c. An exclusive single point sales tax and purchase tax on selected items.
1.2   Subsequently the Andhra Sales Tax Enquiry committee was appointed by the government and based on its recommendations the following changes were effected.
a. An additional single point tax was levied on fine and super fine cloth
b. A purchase tax was levied on raw tobacco and sales tax on manufactured tobacco
c. The single point tax was extended to agricultural and other commodities
d. The list of goods subjected to additional single point tax was expanded
e. Certain commodities were added to the list of exempted commodities
1.3   In the Andhra Pradesh Region , the Tax Structure was more or less modeled on the Madras pattern with some minor different differences and Sales Tax was levied under the Hyderabad General Sales Tax Act ,1950. After the formation of Andhra Pradesh both the regions of Andhra and Andhra Pradesh were brought under a uniform system of Sales Tax with the enhancement of Andhra Pradesh General Sales Tax Act,1957 w.e.f 15-6-1957 with 79 commodities under single point levy.
1.4 In the year 1962 the national council of applied economic research headed by Dr.P.S.Lokanatham popularly called lokanatham committee appointed by the Government reviewed the Sales Tax Structure and made several recommendations the various recommendations accepted by the government were incorporated in the APGST ACT by ACT No.16 of 1963 w.e.f. 1-8-1963 . The additional single point tax on items listed in schedule 1was abolished which resulted in regrouping of the schedules . After regrouping the first schedule contained 67 commodities liable to single point tax at the stage of first sale . The second schedule contained 9 commodities liable to single pointpurchase tax . The third schedule (incorporating Declared Goods)ccts.
1.5 In the year 1974 the coverage of single point levy has been further increased by act no 5 of 1974 following report of Bhootalingam committee.
1.6 In the year 1983 the Government with a view to mobilize additional revenues for the various developmental programs and to bring rate of tax on par with those prevailing in the neighboring stage, issued ordinance no 11 on 19 of 1983. A separate schedule (schedule 6) has been added covering country liquor and foreign liquors for the first time a multi point tax with a set off the turnover on which tax has paid the preceding sale has been introduced partly to check avoidance of tax and partly to get additional revenue.
1.7 In the year 1985 in order to incorporate the various changes brought about by the constitution (forty sixth) amendment act, 1982 the state legislative passed an act no 18 of 1985. The definition of sale, turnover ‘Dealer’ were amended and new changing sections were inserted.
1.8 In the year 1986 the Andhra Pradesh General Sales Tax (Amendment) Act 1986 (act no 19 of 1986) was enacted and the amendment contained therein were brought into force with effect on and from 1st April 1985.
1.9 With a view to mobilize additional resources and to compensate the loss of revenue due to exemption from payment of tax by hotels up to a total turnover of Rs.2 lakhs in a year and also to levy tax on the richer income group of the society the A.P Tax on Luxuries in Hotels and Lodging Houses, Act, 1987 was enacted. In the same year the Andhra Pradesh Tax on Professions, Trades, Callings and Employment act, 1987 and the A.P Entry of goods into Local Areas Tax Act, 1987 were enacted.
1.10 In the year 1989 the A.P.G.S.T (Amendment) Act 1989 (Act No.14 of 1989) was enacted abolishing the multipoint scheme of taxation. sub-section (1) and (2) of the charging section-5 were substituted providing the single point levy of tax .The seventh Schedule which is a residuary inserted by the aforesaid Act provides for the levy of single point of tax on goods which are not enumerated in any of the schedules.
1.11 In the 1993 in order to mobilize additional resource the Andhra Pradesh General Sales Tax (Amendment) Act 1993 (Act no.13 of 1993) was enacted to levy and collect “Turnover Tax” on the gross turnover in lieu of additional tax leviable on the net turnover. By introducing the turnover tax all the second and subsequent sales of dealers whose turnover is above Rs.10 lakhs per annum were subjected to turnover tax.
1.12 In the year 1995 major changes were made by the A.P.G.S.T (Third Amendment) Act 1995 (Act no 22 of 1995). It is proposed to merge the additional tax, surcharge etc. into one unified rate. The number of rates of tax are also, incidentally, brought down from 14 to 8 with the special rates applicable to Petroleum Products, Cosmetics and Liquor. In order to plug the leakage of revenue on the substantial increase in the sale price at other than first sale point, a system of levy of tax on the value added at other than first sale is also proposed on 19 commodities.
1.13 In the year 1996 the A.P Rural Development Ordinance Act 1995 (Ordinance no 21 of 1995) has been issued providing for levy of cess for the development of rural areas in the State. The commodities-paddy and cashew nut are made liable to cess at the rate of 5% on the ad valorem on the quantum of their purchase. The said Ordinance was replaced by the A.P Rural Development Act, 1996 (Act no 11 of 1996).
1.14 In the year 1996 the A.P.G.S.T (Amendment) Act 1996 (Act No.26 of 1996) was passed. The said Act provides levy of turnover tax under Sec.5A on the second and subsequent sale of goods specified in the First Schedule, Second Schedule, Fifth Schedule, Seventh Schedule to the Act. Section 5AA was also inserted providing for levy of tax on trade-mark holders.
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