Amendment to APVAT Act facilitates MRPL’s commercial operations in A.P.

The Andhra Pradesh Legislative Assembly on Saturday facilitated the launch of commercial operations of Mangalore Refinery and Petrochemicals Limited (MRPL) in the State by approving an amendment to the AP Value Added Tax (APVAT) Act, 2005. A Bill to that effect was introduced by Finance Minister Buggana Rajendranath Reddy.

The said amendment paved the way for adding MRPL as an ‘oil company selling oil to another oil company’ to the existing list of 14 such oil companies (dealers) contained in Explanation-IV of the APVAT Act. 

It was stated in the statement of reasons attached to the Bill, that the APVAT Act was introduced with effect from April 1, 2005 providing for levy and collection of tax on intra-State sales and purchases of goods.

All goods except crude oil, petrol, diesel, natural gas, aviation turbine fuel and liquor for human consumption were subsumed in the Goods and Services Tax (GST) consequent to the passing of the AP GST Act, 2017 but the State continues to levy taxes on specified non-GST goods.

The above petroleum products are taxable under Schedule-VI of APVAT Act at different rates at the point of first sale in the State. However, the sales by an oil company selling oil to another oil company are not to be treated as first sales.

M/s MRPL requested the State government to include it under the said Explanation to APVAT in order to commence commercial operations in A.P., which was already given effect in the form of G.O. Ms. No. 10 issued by the Revenue (Commercial Taxes Department) on January 6, 2023.

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