Basic Services: The Basic work of the Federation covers rendering of the
following services with respect to different subjects like:

Industrial Promotion

Industrial Scenario in the State ----The State of Andhra Pradesh has a healthy economy, rich resources and investment friendly policies. It provides a variety of opportunities for Investors in the areas of Industry, Agro-based industries, Infrastructure-Power, Roads, Ports, Telecommunications. 
The thrust areas identified are: 

• Bulk Drugs & Formulations
• Electronics
• Information Technology related Hardware
• Food processing
• Gem
• Jewelry and Marine Foods.

The state has planned consciously through industrial policy of target 2000 and other institutions like APIIC, Industrial development by establishing exclusive industrial estates, chemical complex zone and software parks. The State Government is committed to rapid industrialisation and offers several incentives to new entrepreneurs

Incentives

Sales Tax Incentives:
Sales Tax exemption/deferment for 7/14 years upto 135% of fixed capital investment. Uniform rate all over the state. Sales Tax incentive beyond 135% can be considered for strategically important mega projects with investment of over Rs.1 billion.

Investment Subsidy: 
20% of fixed capital investment subject to a ceiling of Rs.2 million.

Power Subsidy
25% rebate in power bills for a period of 3 years subject to a limit of Rs.5 million

Concessions for captive power generation:
Investment subsidy of 20% upto Rs.2 million for captive power plants. Sales Tax reduced to 4% on diesel used for captive power generation.

Industrial Estates:

Andhra Pradesh has 265 industrial development areas and industrial estates spread over 25,000 acres, suitable for establishing industrial units.

• Four growth centers (Ongole, Bobbili, Hindupur, Vemsoor) at a project cost of Rs.40 crores each, in the pipeline.
• 370 acres of land and ready buildings in the Visakhapatnam Export Processing Zone.
• 800 acres in Visakhapatnam port-based Exim Park
• A chemical complex with a common effluent treatment plant at Pashamylaram, 50 kms, from Hyderabad.
• A software park for electronics industry, in Hyderabad

More about infrastructure visit India's Infrastructure : Investment Opportunities
http://www.nic.in/indiainfra

Mega Industrial Infrastructure Parks:

For more information on Industry and commerce visit Dept. of Commerce http://www.nic.in/commin/



Finance


The Federation maintains close liaison with Banks and Financial Institutions and advises on:

Credit Policy Measures :

• Bank rate reduced by one percentage point from 10 percent.
• Export credit refinance restored to 100 percent of the increase in outstanding export credit.
• Interest rate on pre-shipment export credit reduced from 12 to 11 percent.
• No change in CRR

Deposit and Lending Rates :

• The Minimum period of maturity of term deposits reduced from 30 to 15 days.
• Banks allowed to offer rates based on size of deposits.
• Interest rates on loans below Rs.2 lakhs not to exceed the Prime Lending Rate.
• Advances against term deposits to be at PLR or less.

Advances against shares:
The ceiling on advances against dematerialised shares to individuals increased to Rs. 20 lakh.

Minimum margin prescription against dematerialised shares reduced to 25 percent. Technology is thr crux of quality, efficiency and competitiveness of industry. Federation liaises with institutions like IDBI, SIDBI, APIDC, APSFC for responsive support systems in areas of credit information and technology.

You can also visit  Reserve Bank of India http://www.reservebank.com/

ENERGY


Power is a crucial input for the economic development. The present installed capacity of the State including its share from central generating stations and private sector projects is 6887 MW. The State is a pioneer in private power development. A 272 MW gas turbine unit with APSEB as the promoter and participation by major industries, was set up at Jegurupadu. The first two fast track power projects GVK Industries & Spectrum Power, to be commissioned in India were from the State.

With capacity addition of 1700 MW during 8^th plan period , Andhra Pradesh was above of all other States.

In order to respond to immediate and mid-term increases in electrical demand, the State offers several opportunities for Private Power project Developers through a well established power policy.

Please also visit Ministry of Power http://www.nic.in/powermin/

DIRECT & INDIRECT TAXES


Individual and corporate taxation in India is governed by the Indian Income Tax Act, 1961, Wealth Tax Act, 1957 and Gift Tax Act, 1958 and administered by the Ministry of Finance

Maximum marginal rate of individual tax is 30% and corporate tax is 35%.

Income is liable to tax depending on the residential status of the individual as also the company.

Special provisions exist relating to certain income of Non Resident Indian Citizens and Foreign Nationals of Indian Origin and also Foreign Technicians.

Income from royalties, technical know-how, project reports etc., taxed on presumptive income.

Concessions for establishment of industries in notified backward districts and for investment sin infrastructure, power, mining etc.,

Long term capital gains on foreign companies assessed to tax at 10%.

Tax deducted at source (TDS) at varying rates has to be made for all payments.

India entered into double taxation avoidance agreements (DTAA) with a number of countries.

The Ministry of Finance and the Central Board of Direct Taxes (CBDT) administer the Act. The Central Board of Direct Taxes has the rule making power.

Advance rulings are given by the Central Board of Direct Taxes in respect of Non Residents subject to certain conditions.

Incomes are taxed under the categories – salary including perquisites, interest on securities, income from house property, long term capital gains, income from business, profession or vocation and income from other sources. Each income will have deductions specific to that income.

Various concessions are provided as deductions and in some cases weighted deductions for research, development, exports etc and other deductions applicable to all the incomes.

The rates of taxes, concessions, deductions, exemptions are subject to modifications based on fiscal policies. Such changes are made as part of the annual budgetary exercise through the Finance Act every year.

The Federation provides the linkages with the professional and experts in the above fields on request. The Federation also provides information on notifications, rules, statutes, issued/promulgated from time to time or arrange for the same.

EXCISE


Commodity taxation in India is comprehensive and all pervasive scope and coverage. Union Government imposes Excise duties on all goods manufactured in India and States have been given power under the Constitution to levy Sales Tax on all goods. Indirect Taxes incidentally contribute major share of Government revenue, Central as well as the States.

Realising that Excise affects every section of Industry, large, medium, small and tiny as well as all segments of Trade, the Federation with a majority of its members present in this industries have been providing continuous guidance on matters of Excise and Sales Tax compliance, .

During the last decade and a half the Federation has enlisted the services of a Specialist to guide the members on Excise & Customs matters. The guidance includes
(I) Providing information pertaining to tax rates, fiscal concessions informing members about the procedural changes.
(ii) Conducting Monthly Study Circles,meetings to discuss important topics of current interest,
(iii) To organise at least two seminars every year, one immediately after the Union Budget and the second during the course of the year to discuss in depth the changes introduced by the Finance Minister along with the Budget proposals in the fields of Excise, Customs. Efficient Tax Management in the field of Excise has become an important instrument in cost reduction as well as price viability. Therefore, the Federation provides special guidance to industries and traders about their rights and obligations, mode and method of availing a fiscal concessions.

Procedural compliance is an important imperative for availing several tax concessions. For instance, Modvat which is a device to neutralise the cascading and multiplying effects on multi stage taxation is procedure oriented. Therefore, the Federation has been specially guiding members in  areas of Modvat, procedure, acquainting them about the legal provision and procedural requirement.

The Federation has been focussing the problems of Industries in the field of Excise. Major policy matters concerning tax rates etc., are taken up with the Finance Ministry through Pre-Budget and Post-Budget memoranda as well as periodical representations.

The declaration of Hyderabad Airport as Customs Port, the creation of Appellate Commissionerate at Hyderabad Commissionerates of Customs and Excise at Visakhapatnam are all the results of FAPCCI efforts.

All issues pertaining to procedure difficulties and problems the industries face are taken up through the medium of Regional Advisory Committee in which the Federation is adequately represented. The R.A.C. meets once in a quarter. It is the credit of the Federation that several problems faced by the industries in Andhra Pradesh especially, the small scale sector are focussed in the R.A.C. deliberations, and the issues sorted out by mutual discussions.

In more complex legal issues where members intend to seek judicial remedies by way of writ Petitions, Appeals, etc., Federation has also been providing support to the members about the points to be urged and the Rulings to be cited. However as a representative body the Federation desists from being a party to litigations.

The Industries in Andhra Pradesh have richly benefited by being on the rolls of the Federation thanks to the guidance and support the FAPCCI has been giving them in the field of Excise and Customs.

Detailed information is avaliable on Ministry of Finance http://www.nic.in/finmin/

SalesTax

The Commissioner of Commercial Taxes administers the following enactments:

APGST Act, 1957

CST

Profession tax

Luxury tax

Entertainment tax

APGST ACT, 1957

The APGST Act, 1957 contains more than 250 commodity classifications for purpose of levy and collection of Sales Tax at different rates.

Essential Ingredients for levy of sales tax:


There must be a sale of goods

Sale should be of goods as defined under the APGST Act.
Sale should be done by a dealer

It should be in the course of business

There should be consideration for sale of goods.

Dealers:

Dealer includes any person carrying on Business including a commission agent, the state govt. or central govt. etc.

Registration of Dealers under APGST Act:


Dealers are required to get themselves registered u/s 12 in the following cases:

where turnover in any year is not less than Rs. 50,000/-.

Dealers carrying on business in all or any of the commodities mentioned in first, second, third, fifth and sixth schedules.

Dealers carrying on or execute in Works Contract.

Dealers who transfers the right to use of any goods.

Dealers registered under CST Act.

Dealers residing outside the State but carrying on business in the State.

Every agent of non-resident dealer.

Every commission agent who carries on business by buying, selling, supplying, distributing or delivering of goods on behalf of principal.

Every miller whether he is a dealer or not.

Application for Registration is to be filed before Assistant Commercial Tax Officer having jurisdiction.

Procedure for Registration:


For new dealers A Return Form showing the estimated total and net turnover for the first 12 months.

For the existing dealers return in A-1 Form showing the total and net turnover of the business in the preceding 12 months.

Along with the application for registration the following declarations shall also be enclosed :-

From XIII – A declaration notifying persons authorised to sign and make statements.

Form XXV – A declaration notifying persons responsible to maintain, produce and preserve accounts.

Form XXIX – A declaration notifying persons authorised to receive notices, orders, etc., under the A.P. General Sales Tax Act, 1957.

Application for registration shall be made in Form ‘D’ covering all places of business.

Registration fee Rs.100/- in respect of principal place of business and Rs.20/- in respect of every other place of business.

Mode of payment to be paid in Treasury or by means of a Demand Draft.

Renewal:


Same fee as per registration .

Renewal can be done in 3 years at the option of dealer.

Registration under section 5-B for availing Concessional Tax:

Manufacturers intending to purchase concessional rate of tax of 4% on inputs to make an application in
Form G-1 specifying the goods he intends to buy.

CST Act:


The Central Sales Tax Act, 1956 was enacted for levy, collection of taxes on sales of goods in the inter-state trade or commerce and to specify the restrictions and conditions to which state law imposes tax on the sale or purchase of such goods of special importance shall be subjected to. If sale or purchase occasions movement of goods from one State to another is effected by transfer of documents of title to such goods during their movement from one to another it is deemed to take place in the course of inter-state trade or commerce and such sale of purchase shall be liable to tax and governed by the provisions of the Central Sales Tax Act.

Registration under CST Act:


All dealers liable to pay tax under CST Act should get themselves registered.

Application shall be in Form ‘A’ covering all such places of business.

Registration fee Rs. 25/-.

Liberalisation and simplification of registration procedures.

No need for security deposit for companies registered themselves under Companies Act.

Only companies dealing in sensitive commodities like paddy, rice, oilseeds need pay security deposit.

Consolidated rates of tax have been adopted from 1.4.95 as against tax in different components. All commodities are taxable at single point which means that tax is payable at the firs point and sales in second and subsequent stages are exempt from tax. However, VAT was introduced in retail with a ceiling of 10 lakhs on 22 commodities listed hereunder taxable at every point of sale with a provision for set-off of tax.

The different schedules of rates applicable under the APGST are available with the Federation. The tax rates were either fixed by statute i.e. APGST Act or modified by specific notifications under section 9 of the APGST Act. The Government is empowered to exempt or amend the rate of tax under Section 9 of the Act. The present taxation rates are as a result of statute changes or separate notifications modifying the existing structure. The list showing the commodities together with their code number and rate of tax existing is reproduced below:

First schedule - Sale point goods (201)

Second schedule - Purchase point goods (21)

Third schedule - Declared goods (23)

Fourth schedule - Not liable to tax (12)

Fifth schedule - Jaggery

Sixth schedule - VAT items (23)
The Government introduced TOT in second and subsequent stages from 1.8.96 at uniform rate of 1% payable by dealers with a total turnover of 10 lakhs. TOT is however not applicable on dealers who pay tax at the first stage.
TOT is also not payable on that part of the turnover which relates to:

sale or purchase of goods specified in Third Schedule;

sale or purchase of goods specified in Fourth schedule;

sale or purchase of goods specified in Six schedule;

sale or purchase of goods in the course of inter-state trade or commerce;

sale or purchase of goods in the course of export out of the territory of India or sale or purchase in the course of
import into the territory of India;

sale or purchase of goods exempt from tax generally under sub-section(1) of section 9 of the said Act;

all amounts collected by way of tax under the provisions of the Central Sales Tax Act, 1956.


Industrial Relations


Following Services are available in the area of Industrial Relations administered in the State, by the Commissioner of Labour

Interpretation of statutes applicable to factories/Shops & Establishments with reference to the case law available
as of date.

Feeding information to members on various government orders issued    by both Central and State    Governments from time to time.

Advise on resolving Industrial Disputes, Enforcement of Labour      Legislations i.e. Factories Act,   A.P.Shops & Establishments Act, Minimum wages Act, Payment of wages Act, Industrial employment (Standing Orders ) Act, ESI Act, EPF Act, Payment of Bonus Act, Payment of Gratuity Act, Industrial Disputes Act, Employment Exchange (Compulsory Notification of vacancies) Act, Contract Labour Act, Apprentices Act, Indian Trade Union Act, Workmen Compensation Act, A.P.factories & Establishments (National Festival and other Holidays) Act, Maternity Benefit Act etc.

Representation to the central and state governments on major issues affecting the   industries/establishments.

- Organising seminars/workshops, round-table meetings to interact with members and government officials on vital problems relating to Industrial Relations.

Consumer Relations.
Infrastructure facilities like -:
Railways.
Airways.
Roadways.
Post and Telecommunications.
Tourism.
Agriculture and Food Processing Industries



Agriculture


Background
The total value of Agricultural produce in Andhra Pradesh is Rs.5849 crores and constitute 38 percent of Net State’s Domestic Product. The State has soils ranging from deltaic soils to black cotton and rich red loamy soils. The State is endowed with a wide range of agro climate conditions which favours the production of a variety of crops.

Scope:
There is a wide gap between the potential yield and the average yields achieved by the farmers.The State government has set out on a far reaching programme on increasing quite substantially the area under irrigation within outlay of Rs.5,300 crore spread over the next three years.Andhra Pradesh stands first in production of Chillies, Tobacco and Turmeric, second in Oil seeds production and is third in processed food production.During 1995-96, the total value of Agricultural/Agro based exports from the state stand at Rs. 1,067 crore, and that of leather, animal & marine products at Rs.1,028 crore.

Opportunities:
With the changing lifestyle of Indians, consumption of processed foods increasing and with globalization, tremendous opportunities exist for exports. Inputs for realisation of this potential can come from entrepreneurs in the form of

• High quality market intelligence in consumer preferences.
• Genetic engineering for better varieties, pest and disease resistance;
  
              c) Propagation through tissue culture.
  
              d) High quality seed multiplication.
  
              e) Extension and improvement of irrigation systems.
  
              f) Agricultural implements for farm mechanisation.
  
              g) Agro-chemicals production and distribution
  
              h) Better technologies for packing, presentation and distribution.
  
  Entrepreneurs can also explore the opportunities in organic farm produce. Demand in Domestic market is quite negligible, due to lack of awareness and the high prices beyond the reach of a common man. But the demand for the same undeveloped countries is increasing and is estimated to be presently at $5 billion.

A booming agricultural economy


Andhra Pradesh is endowed with excellent irrigation resources and an extensive agro base. An extent of
12.20 million hectares is cultivated with food grains/oil seeds/ spices/ commercial crops. The annual production
of food grains is 13 million tonnes including 10 million tonnes of fine varieties of rice. The State Contributes
nearly 2 million tonnes annually to the Nation’s buffer stocks. Since there are export surpluses, there is scope
for production and export of certified organic rice/fine varieties of rice.

With an area of 300 thousand hectares under crops like chillies, Turmeric and Coriander, Andhra Pradesh accounts for 40% of country’s production of spices, and 35% of country’s exports of spices and spice products. Spices and spice products valued at Rs.1,800 million are exported from A.P. There is considerable scope for investment in processing of these spices for value added exports. Consumer packs of curry mix, curry packs, spice oil and oleoresins are potential areas for value added exports.
Andhra Pradesh ranks first in the country in cultivation of Virginia Tobacco with an annual production of about 1.5 million Kgs., and export value of 6 million dollars. There is further scope for export of quality tobacco products.

AP’s long coastline. An asset for Aquaculture / Fisheries

Andhra Pradesh is bestowed with abundant marine, fresh water and brackish water resources, which have been well exploited by the fishermen, progressive farmers and enthusiastic entrepreneurs.

In the fresh water Aquaculture sector, there are nearly 50,000 Ha of ponds constructed exclusively for fish culture. Nearly 65,000 Ha of area has been brought under brackish water shrimp culture. There is scope for entrepreneurs to have the Satellite farming approach where the big entrepreneurs will have the role of acting as nucleus farm.

There are good prospects for diversifying the culture practices to other species of fish, lobsters and crab, process and export them to the potential markets in American, European and South East Asian Countries. There is also good scope for fresh water prawn culture and their hatcheries. Diversification to new fish species like Tilapia nilotica and cage culture systems in major reservoirs like Nagarjunasagar, Srisailam etc., are some areas which have scope for commercial exploitation and export to West Asian, African and other countries.
 

Oil Seeds – In plenty for an Edible Oil Revolution

Andhra Pradesh is one of the leading oilseeds growing states in the country. Groundnut contributes about 80% of the total Oil seeds production. Sunflower cultivation has made rapid strides in the last five years. Big industrial houses like ITC have already entered Sunflower processing.
Castor is another important oilseed crop with a large acreage of 0.25 Million Ha and an annual production exceeding 60,000 MTs. There is good potential to set up castor based processing industry.

Oil palm cultivation and processing has made spectacular progress
with the participation of A.P. Oil seeds Federation and also a
number of progressive private companies who have been allotted areas for Oil Palm cultivation and processing. Opportunities are available for joint ventures with companies already having area allotments and also for technical collaboration to set up integrated Oil Palm processing units. Palmtech India Ltd., (ITC Division), Mac India Ltd., Foods Fats, & Fertilisers Ltd., Navabharat Enterprises Ltd., Godrej Soaps, and A.P. Oilfed are some of the companies which are going ahead with setting up of processing units/ area development.

Vegetables & fruits – A Horticultural Bonanza

Andhra Pradesh stands second in the production of fruits in the country and first in productivity. The important fruits grown in the State are Mangoes, Grapes, Bananas, Citrus, Coconut, Guava, Custard apple. Pomegranate, Sapota and Pineapples. 0.25 million Ha are grown under mango, 58,600 Ha under Citrus (Oranges & Lemon), and 33,300 Ha under Banana. 40,000 Metric tonnes of excellent quality grapes are grown in the state.

Banganapalli (Benishan), Totapuri, Neelam, Cherku Rasam, Peddarasam and Chinnarasam are important Mango varieties of Andhra Pradesh.
Mangoes from A.P. have been exported to the Middle East, South East Asia and Europe for the last two seasons and consumer preference for these varieties has been established in the foreign market.
In grapes, Thompson seedless (also known as ‘Oval Kismish’ in the Mediterranean region and ‘Sultania’ in Australia and South Africa) and Anab-E-Shahi are the leading grape varieties.
Tomatoes, Brinjal, Bhendi (Lady’s finger), Gourds, Cucumber, Beans, Tapioca, Green and Onions are the important vegetables of Andhra Pradesh.
The above abundant variety and availability of fruits and vegetables offer tremendous scope for preservation, processing, marketing and export by application of techniques such as canning, cold storage, dehydration, accelerated freeze drying etc., There is also good potential for manufacture and export of fruit pulp and juices in aseptic packaging.

Complete infrastructure for Agro based industries

Andhra Pradesh has got good infrastructure facilities required for Agro based industries. An elaborate network of agricultural market yards, warehouses, cold storages and canning facilities is available. Impetus is being given to develop post harvest technologies and cold storage facilities. Visakhapatnam and Kakinada Ports and the Air Cargo complex at Hyderabad Airport provide easy access to export and import destinations.
More information on food processing visit Ministry of Food Processing Industries http://www.nic.in/mofpi/

National Agricultural Cooperative Marketing Federation of India Limited (NAFED) http://www.nic.in/nafed/

Indian Council of Arbitration(ICA):

Arbitration and Alternate Dispute Resolution

Arbitration and Conciliation Act, 1997

Indian Council of Arbitration, ‘Federation House’, Tansen Marg, New Delhi with a branch at FAPCCI, Hyderabad at D.No.11-6-841, Red Hills, organises and provides facilities for Arbitration and Alternate Dispute Resolution both for international arbitration as well as domestic arbitration.

ICA., with renovated office premises and modernised infrastructure facilities like computers, simultaneous foreign language translation facilities, court room etc is well geared to provide efficient and qualitative arbitral services.

In order to provide arbitration services under the rules of Foreign Arbitral Organisations (FAO), the Council has entered into arbitration services agreement with important arbitral organisations including international in different parts of the world. The agreements provide for conduct of arbitration proceedings by the ICA under the rules of respective foreign arbitrational organisations for holding the arbitration hearings in India.

The Federation provides the linkages for arbitration and alternate dispute resolution both international as well as domestic under the international arbitration rules and under the Arbitration and Conciliation Act of India, under the supervision and guidance of the Indian Council of Arbitration.

CERTIFICATE OF ORIGIN

COMMERCIAL INVOICE

VISA

COVERING LETTER

INDEMNITY BOND

COMMERCIAL PACKING LIST