REGISTRATION UNDER THE AP VAT ACT
This query is : Resolved
08 August 2009
AS PER THE AP VALUE ADDED TAX ACT 2005 LEAFLET 14 vide ITEM (1)(b) IF AN AGENT SELLS GOODS ON BEHALF OF THE AGRICULTURIST PRINCIPALS HE IS UNDER NO OBLIGATION TO OBTAIN REGISTRATION UNDER ACT. SUCH AGENTS USE TO MAINTAIN RECORDS IN FORM 521 AS PROVIDED IN RULE 34(1). IT WAS SUFFICIENT AS PER THE ACT. BUT AFTER THE ADDITION OF SUB SECTION 10(a) UNDER SECTION 4 VIDE ACT NO.28 OF 2008, WHAT IS THE POSITION OF AGENTS WHO SELLS GOODS ON BEHALF OF THE AGRICULTURIST PRINCIPALS. IS IT NECESSARY FOR SUCH AGENTS TO OBTAIN REGISTRATION UNDER THE AP VAT ACT 2005?
09 August 2009
The advantage of registration under the AP Vat is the facility to set off input and output tax as stated in the Act plus CST liability. If there is no such advantage and the turnover is below the bench mark use your discretion
10 August 2009
SRI M. PRABHAKARJI MENON, THANK YOU FOR YOUR VIEW. I AM NOT ASKING ABOUNT OF THE ADVANTAGE OF REGISTRATION. BUT I WANT TO KNOW WHETHER REGISTRATION IS REQUIRED FOR AGENT WHO SELLS GOODS ON BEHALF OF THE AGRICULTURIST PRINCIPALS AFTER THE INSESATION OF SUB SECTION 10(a) IN SECTION 4 OF THE APVAT ACT.
20 July 2025
Regarding your query on registration requirement for agents selling goods on behalf of agriculturist principals under the AP VAT Act 2005, especially after the insertion of sub-section 10(a) in Section 4 by Act No. 28 of 2008, here is the clarification:
Background:
Before the amendment, agents selling goods on behalf of agriculturist principals were not required to obtain VAT registration.
They maintained records in Form 521 as per Rule 34(1), which was considered sufficient.
After the insertion of sub-section 10(a) in Section 4:
This amendment generally deals with liability to pay tax and registration provisions.
However, the exemption for agents of agriculturists was not withdrawn explicitly.
The agents selling goods on behalf of agriculturist principals are still not required to obtain VAT registration, provided their turnover remains below the threshold limit.
Important Points:
The agents must maintain proper records in Form 521 for all sales made on behalf of agriculturists.
If the agent’s turnover crosses the VAT registration threshold (turnover limit), registration may be required.
The main purpose of registration is to avail input tax credit and fulfill tax compliance, which may not be applicable in case of agents acting purely on behalf of exempt principals like agriculturists.
If there is any confusion or dispute, the agent should seek clarification from the local VAT authorities or consult a tax professional.
Summary:
As per the current understanding, agents selling goods on behalf of agriculturist principals are NOT mandatorily required to register under AP VAT Act post amendment by sub-section 10(a), unless their turnover exceeds the prescribed threshold.
Background:
Before the amendment, agents selling goods on behalf of agriculturist principals were not required to obtain VAT registration.
They maintained records in Form 521 as per Rule 34(1), which was considered sufficient.
After the insertion of sub-section 10(a) in Section 4:
This amendment generally deals with liability to pay tax and registration provisions.
However, the exemption for agents of agriculturists was not withdrawn explicitly.
The agents selling goods on behalf of agriculturist principals are still not required to obtain VAT registration, provided their turnover remains below the threshold limit.
Important Points:
The agents must maintain proper records in Form 521 for all sales made on behalf of agriculturists.
If the agent’s turnover crosses the VAT registration threshold (turnover limit), registration may be required.
The main purpose of registration is to avail input tax credit and fulfill tax compliance, which may not be applicable in case of agents acting purely on behalf of exempt principals like agriculturists.
If there is any confusion or dispute, the agent should seek clarification from the local VAT authorities or consult a tax professional.
Summary:
As per the current understanding, agents selling goods on behalf of agriculturist principals are NOT mandatorily required to register under AP VAT Act post amendment by sub-section 10(a), unless their turnover exceeds the prescribed threshold.
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