diff --git a/src/k8s-extension/HISTORY.rst b/src/k8s-extension/HISTORY.rst
index f48c9059b08..50684dd4731 100644
--- a/src/k8s-extension/HISTORY.rst
+++ b/src/k8s-extension/HISTORY.rst
@@ -3,6 +3,10 @@
 Release History
 ===============
 
+1.3.2
+++++++++++++++++++
+* Create identity for Appliances clusters
+
 1.3.1
 ++++++++++++++++++
 * microsoft.azureml.kubernetes: Always show TSG link for AzureMLKubernetes extension at the head.
diff --git a/src/k8s-extension/azext_k8s_extension/custom.py b/src/k8s-extension/azext_k8s_extension/custom.py
index 1643678e6c7..249bfcfd5b2 100644
--- a/src/k8s-extension/azext_k8s_extension/custom.py
+++ b/src/k8s-extension/azext_k8s_extension/custom.py
@@ -412,11 +412,8 @@ def __create_identity(cmd, resource_group_name, cluster_name, cluster_type, clus
     subscription_id = get_subscription_id(cmd.cli_ctx)
     resources = cf_resources(cmd.cli_ctx, subscription_id)
 
-    # We do not create any identities for managedClusters or appliances
-    if (
-        cluster_type.lower() == consts.MANAGED_CLUSTER_TYPE
-        or cluster_type.lower() == consts.APPLIANCE_TYPE
-    ):
+    # We do not create any identities for managedClusters
+    if cluster_type.lower() == consts.MANAGED_CLUSTER_TYPE:
         return None, None
 
     cluster_rp, parent_api_version = get_cluster_rp_api_version(cluster_type=cluster_type, cluster_rp=cluster_rp)
diff --git a/src/k8s-extension/setup.py b/src/k8s-extension/setup.py
index 85d18cd327c..968417737e4 100644
--- a/src/k8s-extension/setup.py
+++ b/src/k8s-extension/setup.py
@@ -33,7 +33,7 @@
 # TODO: Add any additional SDK dependencies here
 DEPENDENCIES = []
 
-VERSION = "1.3.1"
+VERSION = "1.3.2"
 
 with open("README.rst", "r", encoding="utf-8") as f:
     README = f.read()