Services: The Basic work of the Federation covers rendering of the
following services with respect to different subjects like:
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,
The thrust areas identified are:
Drugs & Formulations
Technology related Hardware
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
Sales Tax Incentives:
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.
20% of fixed capital investment subject to a ceiling of Rs.2
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
Andhra Pradesh has 265 industrial development areas and industrial
estates spread over 25,000 acres, suitable for establishing
growth centers (Ongole, Bobbili, Hindupur, Vemsoor) at a project
cost of Rs.40 crores each, in the pipeline.
acres of land and ready buildings in the Visakhapatnam Export
acres in Visakhapatnam port-based Exim Park
chemical complex with a common effluent treatment plant at
Pashamylaram, 50 kms, from Hyderabad.
software park for electronics industry, in Hyderabad
More about infrastructure visit India's
Infrastructure : Investment Opportunities
Mega Industrial Infrastructure Parks:
MIIP – Parwada
A 3,500 acre Mega project located 25 KM from Visakhapatnam.
MIIP – Krishnapatnam
A 15,000 acre project being developed by a consortium of MNCs
MIIP – Kakinada
A project optimally suited agro based and export oriented
MIIP – Wadapally
A 15,000 acre project envisaged as a counter magnet to ease
the pressure of industrial activity at Hyderabad, the
Hitec City, Hyderabad
An investment destination for leading software companies,
providing an excellent industrial and social infrastructure.
For more information on Industry and
commerce visit Dept. of Commerce http://www.nic.in/commin/
The Federation maintains close liaison with Banks and
Financial Institutions and advises on:
Credit Policy Measures :
rate reduced by one percentage point from 10 percent.
credit refinance restored to 100 percent of the increase in
outstanding export credit.
rate on pre-shipment export credit reduced from 12 to 11
change in CRR
Deposit and Lending Rates :
Minimum period of maturity of term deposits reduced from 30 to
allowed to offer rates based on size of deposits.
rates on loans below Rs.2 lakhs not to exceed the Prime Lending
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/
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 8th
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
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
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
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
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
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.
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
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
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/
The Commissioner of Commercial Taxes
administers the following enactments:
APGST Act, 1957
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.
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
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
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
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
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
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.
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
Application shall be in Form ‘A’ covering all such places of
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
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
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.
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
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
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
Infrastructure facilities like -:
Post and Telecommunications.
Agriculture and Food Processing Industries
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
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
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
quality market intelligence in consumer preferences.
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
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
A Cross section of Tobacco Exporters
1. VST Industries Ltd., Hyderabad
2. Indian Leaf Tobacco Development
3. Navabharat Tobacco Company Ltd.,
4. Bommidala Brothers (Pvt.) Ltd., Guntur
5. Suleman Khan & Mahaboob Khan
Tobacco Ltd., Guntur.
6. M/s. I.T.C. Hyderabad
Leading Rice Exporters
1. Ushodaya Enterprises, Hyderabad
2. Krishna Mohan Exports Ltd., Hyderabad
3. I.T.C. (India) Ltd., I.B. Division,
4. Oswal Polar India Ltd., Hyderabad
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
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
Some big names in Fisheries &
1. Coromandal Fisheries (Pvt.) Ltd.,
2. VBC Exports Ltd., Visakhapatnam
3. Rank Aqua Estates (Pvt.) Ltd.,
4. I.T.C. Limited, Vizag
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
Major Oil Seeds Units
1. Andhra Oil Cake Products Ltd.,
2. Andhra Pradesh State Co-op. Marketing
3. Foods Fats & Fertilisers Ltd.,
4. ITC Ltd., Kurnool Dist.
5. Farooq & Sons, Kurnool Dist.
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
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
Complete infrastructure for Agro based
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
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.
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