Farmers are not regarded as in business if they are selling their own agricultural produce and they are outside the scope of VAT. However, if they process them into some other form and sell, they are liable to tax if their turnover is above the threshold limits, e.g. conversion of paddy to rice, sugarcane to jaggery, oilseeds to vegetable oil and consequently, their sales.
Persons other than farmers who are in the business of buying or selling such produce whether processed or unprocessed are liable to pay tax under the APVAT Act, 2005 provided their turnovers are above threshold limits.
If the value of the goods you sell in the State of Telangana exceeds Rs.40 lakhs in any period of 12 consecutive months or exceeds Rs.10 lakhs in any period of 3 consecutive months, you must register for VAT.
If the value of the goods you sell exceeds Rs.5 lakhs in any period of 12 consecutive months, you must register for Turnover Tax.
If you make inter-State sales, transactions of transfers or consignment sales outside the State under the Central Sales Tax Act, 1956, you must register for VAT and pay VAT at the rate specified in the APVAT Act, 2005.
If you are registered for Turnover Tax, you must account for Turnover Tax at the appropriate rate.
In such a situation, you are liable to pay tax at 4% on the purchase value of the agricultural goods Purchased from persons not registered as VAT dealers.
No. Your principal has to pay VAT on the transaction and he should authorize you to issue a tax invoice on his behalf. He must account for VAT on the transaction and only he can take credit for any input tax for the purchases of taxable goods in A.P. from VAT.
The invoice/tax invoice you obtain from the seller must be made out in the name of your principal. In the case of a tax invoice, the principal’s TIN must be shown on the tax invoice.