Introduction
In a significant compliance shift, Professional Tax (PT) registration is now mandatory for all GST-registered businesses, regardless of turnover or employee count. This rule, already implemented in states like Maharashtra, Karnataka, Telangana, has now been extended to Andhra Pradesh (AP) with effect from April 1, 2025.
The move aims to formalize state-level revenue collection and ensure wider tax base coverage. This article breaks down the amendment, its applicability in AP, and action points for businesses, freelancers, and professionals.
What is Professional Tax?
Professional Tax is a state-imposed tax on individuals engaged in professions, trades, or employment. Each state has its own PT Act, rates, and collection mechanism.
Who Pays Professional Tax?
| Category | PT Applicability |
|---|---|
| Salaried employees | Deducted monthly by employer |
| Proprietors/Business Owners | Pay annually |
| Professionals (CAs, lawyers, doctors) | Pay annually |
| Freelancers and Consultants | Pay annually |
- Maximum PT payable: ₹2,500 per annum (as per most state laws)
- Authority: Collected by state commercial tax or municipal departments
New Amendment: PT Now Mandatory for All GST-Registered Businesses
As part of the compliance overhaul, several states now mandate Professional Tax for all GST holders, irrespective of turnover or employee count.
Key Points:
- Mandatory PTEC (Enrollment) Registration: Even if you have no employees
- PTRC (Registration) Needed: If you have salaried staff
- Applies to proprietors, LLPs, partnerships, companies, freelancers
- Non-compliance can lead to daily penalties and prosecution
This amendment reflects the state government’s intent to align indirect tax and state-level levies, bringing more entities into the compliance net.
Andhra Pradesh Update: Effective April 1, 2025
What Changed?
Under G.O. Ms. No. 63 dated March 5, 2025, the Andhra Pradesh Commercial Taxes Department (APCTD) has taken over Professional Tax administration from municipal bodies in Visakhapatnam and Vijayawada, effective April 1, 2025.
Key Takeaways:
- New Authority: APCTD now manages PT collection and enforcement
- Mandatory for GST-holders: Including those with no employees
- Transition Required: Existing municipal PT registrations must be migrated
- Employee Threshold: Deduction mandatory for salaries ₹15,000/month and above
- Turnover Clause: Any GST-registered entity with turnover above ₹10 lakh must comply
This complements the June 2024 amendment making PT mandatory for GST holders in the rest of Andhra Pradesh.
Applicability Table
| Entity Type | GST Registered? | PT Mandatory in AP (2025)? |
|---|---|---|
| Proprietorship Business | Yes | Yes |
| Partnership Firm | Yes | Yes |
| LLP | Yes | Yes |
| Private Limited Company | Yes | Yes |
| Freelancer/Consultant | Yes | Yes |
Compliance Checklist for Andhra Pradesh
| Task | Details |
|---|---|
| PT Registration Portal | https://apct.gov.in |
| Enrollment Certificate (PTEC) | For business owners/professionals |
| Registration Certificate (PTRC) | For deducting PT from salaried employees |
| Due Date for PTEC Payment (Annual) | June 30 every year |
| Monthly PTRC Returns (if applicable) | 10th of every month |
| Penalty for Non-Registration | ₹5–₹20/day + interest on dues |
Penalties for Non-Compliance
| Non-Compliance Type | Penalty/Consequences |
|---|---|
| Late Registration | ₹5 to ₹20 per day |
| Non-Payment of PT | Interest at 1.25% per month + penalty |
| Failure to File Returns | Penalty up to ₹1,000 |
| Willful Default | Prosecution provisions may apply |
Frequently Asked Questions (FAQs)
1. Is PT registration compulsory in Andhra Pradesh if I have GST but no employees?
Yes. All GST-registered businesses must obtain PTEC, even without employees.
2. What is the Professional Tax amount for proprietors in AP?
Typically ₹2,500 per annum, payable by June 30 every year.
3. What changed from April 1, 2025, in Visakhapatnam and Vijayawada?
The APCTD replaced municipal authorities as the PT enforcement body in these cities.
4. Is the PT mandate applicable outside Vizag and Vijayawada?
Yes. It was already implemented statewide for GST-registered businesses since June 2024.
5. Are freelancers and online sellers with GST registration required to comply?
Yes. They must obtain Professional Tax Enrollment (PTEC).
Conclusion
The Professional Tax regime in Andhra Pradesh has been tightened significantly. With the April 2025 transition to APCTD for PT collection in urban areas, GST-registered businesses must now prioritize PT compliance, even if they operate solo or have no employees.
For businesses in Visakhapatnam, Vijayawada, or anywhere in Andhra Pradesh, ensure:
- Timely PTEC registration
- PTRC compliance if hiring staff
- Annual payment before June 30
- Monthly returns (if applicable)
Stay compliant. Stay updated. Avoid penalties.
For more professional tax updates and simplified guides, explore more on Stox N Tax.
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