Differential Tax Levy under GST

Differential Tax Levy under GST: Food Firms May De-Register Trademarks

The government’s Move to charge on trademark food brands is leading several rice, wheat, and cereal manufacturers to consider de-registering their product trademarks.

 

Irked by the June 28 central government notification fixing a 5 per cent goods and services tax (GST) rate on food items packaged in unit containers.   Registered brand names, the industry has made several representations to the government to reconsider the differential tax levy, which these players say is creating an unlevel playing field within these highly-competitive and low-margin industries.

 

 

Sources say that the move has affected the packaged rice industry the hardest and allowed the unregistered market leaders, India Gate and Daawat, to gain the advantage as compared to other registered brands such as Kohinoor and Lal Qilla.

 

Smaller players are even more worried about this enhanced rate of tax (against the otherwise ‘nil’ rate) on registered brands, which they claim results in a severe loss of competitiveness. Reacting to the situation, many of these manufacturers are even taking the drastic step of re-registering their trademarks to place themselves on the favorable side of the playing field, much to the dissatisfaction of the rice lobby.

 

The Body has lodged a formal complaint with the Ministry of Finance and the GST Council over rice exporters and traders de-registering their trademarks to escape the GST dragnet.

 

Differential tax treatment between registered brands vis-a-vis brands

 

What makes the difference even starker is the fact that the enhanced tax rate will apply to only those brands with trademarks in force and not others.

 

The differential tax treatment between registered brands vis-a-vis brands for which registration applications are pending, brand names which are registered outside India or unregistered brands which spend substantial amounts on brand building and operate at similar commercial levels may lead to unequal treatment of equals, without any intelligible differentia.

 

Prior to the GST regime, branded food products were charged a standard central excise tax, regardless of whether they had trademarks. Sources say that this classification was not acceptable to the GST Council as it taxed even micro-brands, to the disadvantage of smaller manufacturers.

 

GST affected Rice Manufacturers

 

To rectify this, the council decided to levy a tax only on trademark products. However, instead of providing an advantage to these smaller players, the distinction has led to severe uncertainty in the market and also raised issues of constitutional irregularity, note experts.

 

Although these affected manufacturers are said to be looking at alternate possibilities, any applications for deregistration of trademarks will be at the discretion of the trademark registry, according to Section 58 of the Trademarks Act, 1999. The request could also take a considerable amount of time as no time-period is prescribed to process the application. Until the registry confirms the request in writing, the mark will continue to remain as registered within the meaning of the Act and as a result, could continue to be liable for the higher rate of GST, adds Dutt.

Trademarks are representative of quality and origin

According to Dev Robinson, national practice head, IPR, Shardul Amarchand Mangaldas, trademarks are representative of quality and origin.

 

The government’s decision to tax registered and unregistered brands differentially seems counterintuitive to developing brand worthiness in these highly competitive markets.

 

Experts have also raised health and quality concerns associated with deregistration of trademarks. Although the Food Safety and Standards (Food Products and Food Additives) Regulations 2011, which lay down safety standards for food products, do not differentiate between trademark and non-trademark goods, it could become harder for the authorities to ensure compliance with these requirements for non-trademark and imitation products.

 

Registration of trademarks is also a prerequisite for recorded before customs, which tackles issues of counterfeit import and export. Deregistration of a trademark can hamper such activities. If the government’s intent was to impose taxes, it should have been on brands per se but not targeted on registered marks.

 

Companies having registered trademarks abroad who choose not to obtain trademark registrations in India would also have stronger protection in case of such passing off actions.While experts are in agreement that the present scenario poses a unique challenge for the government and the affected industries, they also highlight that establishing an alternative approach may prove difficult. All eyes are on the Saturday GST Council meet in the hope of finding a viable solution to the issue.

Common mistakes – Income Tax Filing

Common mistakes of Income Tax Filing

 

* Neglecting to give Aadhaar number

In case you are deferring your landing recording past 30th June 2017 and you are met all requirements to get an Aadhaar or starting at now have an Aadhaar distributed in your name, don’t miss to quote that in your Income Tax Return. From first July 2017, it is necessary to refer to the Aadhaar number or Enrolment ID in the evaluation frames by every single qualified resident. Fail to do thusly will discredit your landing and other related results may fall.

* Neglecting to File I-T Return

Do whatever it takes not to trust that your commitments end once all your evaluation demands are clear. If your wage outperforms Rs. 2.5 lakh for Financial Year 2016-17, you need to record an Income Tax Return. Remember that this compensation is registered before speaking to each one of the determinations.

* Recording Physical Return where e-Filing is required

The administration gives you the choice to either record your assessment form physically or does it on the web. Be that as it may if your assessable wage surpasses Rs. 5 lakh, it ends up plainly obligatory for you to re-record your expense form. Regardless, if you are a senior local, you can regardless report a physical return.

Income Tax Filing

* Not Studying Form 26AS

Your Form 26AS or Tax Credit Statement gives all of you the critical points of interest of charges you have paid. Keep in mind to check it before documenting your government form. It will help you in dispensing with any blunders in duty computations so you can record a precise return.

* Wrong Personal Details

Envision what will happen if your discount gets credited to someone else’s ledger or your discount check gets conveyed to the wrong address. Giving wrong individual points of interest in your ITR can make a few issues this way. Consequently, you should stay away from such senseless blunders and record painstakingly.

* Barring FD Interest from your Income

Intrigue pay from your spring record is excluded up to Rs. 10,000 however intrigue salary from your FD isn’t. Half information is a risky thing that winds up plainly clear when a few people bar FD enthusiasm from their assessable salary. Keep in mind that each and every rupee earned for this situation is chargeable to assess.

* Under-announcing your Income

Keep in mind that concealing your wage to dodge duty is wrongdoing. On the off chance that got, you can wind up paying a substantial punishment and even land in prison. These days, the force office is easily prepared to track your compensation through your PAN.  Each huge exchange is accounted for every year by organizations, banks and other money related substances to the legislature. In this way, you ought to uncover all your wage, clear your obligation commitment and record cost shapes on time. For example, if you have two house properties, you need to add rental pay to your wage-paying little respect to the likelihood that you don’t have any. You ought to uncover wage earned through Shares, Mutual Reserves, Property Capital Gains, et cetera. If you have traded occupations various conditions in a year, you ought to bring your compensation from each one of the organizations to light.

* Neglecting to Report Exempt Income

There are a few unique sorts of wages that are absolved from assessment. e.g. on the off chance that you have profit pay from stocks or premium pay from funds ledger, you can spare a decent measure of cash from the expense net by informing the charge division about it in your ITR.

* Utilizing Wrong ITR

I-T division has prescribed different ITR outlines for different sorts of residents. You need to pick your ITR carefully before reporting your costs or else the force office will expel it and demand that you record a reevaluated return.

* Not Verifying Tax Return

This is an exceptionally regular error set aside a few minutes to assess filers. Such individuals believe that their occupation is done once they have recorded their expenses. They disregard checking their entry and send key chronicles to the I-T division. In the event that you e-document your charges, you can either e-check your assessments from the I-T office’s e-recording entry or complete physical confirmation by sending a printed and marked a duplicate of ITR-V to CPC-Bengaluru.

* Not Revising Your Return

On the off chance that you have committed an error in announcing your pay and investment funds amid the year, you can even now amend the arrival by recording a changed return. Till past Financial Year, the legislature permitted charge filers to reexamine return within two years from the finish of the Financial Year for which the arrival was recorded. In any case, from this Financial Year or F.Y. 2017-18, you will get just a single year to reconsider your arrival from the finish of important F.Y. In this way, in the event that you discover any slip-ups from your end in your documented return then you ought not to sit tight for a notice from expense office before making any move. Rather, you ought to instantly document a reconsidered one.

Checklist for filing Income Tax Return

Checklist for filing Income Tax Return – 2017

Income Tax return: Commonly, the due date for documenting the wage assessment form of the past money-related year is July 31. In spite of the fact that you have time close by, it is constantly better to begin getting ready right on time to maintain a strategic distance from the very late scramble. You can utilize an agenda of records that you have to keep inconvenient to maintain a strategic distance from slip-ups in documenting your expense form.

 

 

Here is a 10-point cheat-sheet

  1. If you are a salaried individual, you would require Form 16, which is issued by the business. It contains your compensation unobtrusive components close by the TDS (force deducted at source) for purposes of intrigue. You have to accumulate Form 16 from each one of the organizations you have worked within the cash-related year for which you are recording the landing.
  2. You need your bank statement to report the interest income that you have earned on your savings and fixed deposits.
  3. On the off chance that you have gotten whatever other salaries, for example, profit, lease, or blessing above Rs. 50,000, you have to give insights about it in your government form. A portion of the salary like profit pay is duty excluded however you need to report them on your arrival.
  4. Collect Form 16A which provides details of the TDS deducted on account of any income that you have received. For example, collect the form from the bank if it has deducted TDS on interest income.

  5. If you have rental income and your tenant has deducted TDS on rent, then collect form 16A from there too.

  6. Form 26AS is also an important document that you need to check before filing a return. It is basically your tax credit statement that shows all taxes received by the Income Tax Department. You can download it from the tax department’s website. All tax deductions and high-value transaction get reported in this form
  7. If you have sold any property, shares, and mutual funds during the year, you need to keep details of the transactions for computation of capital gains tax.
  8. To claim deductions, you need to keep handy all the documents related to your investments made during the year. Also, if you have availed of any loans such as home loans and education loans, keep the bank statements to avail deduction for interest and principal repaid.
  9. This year assesses with income over Rs. 50 lakh during the year will have to give details of their movable (such as cash, jewelry, and vehicle) and immovable (land and building) assets in the tax return
  10. You also need to report details of any other income which is derived or earned from outside India plus the details of all the immovable property or any capital asset held at any time during the year outside Indiaincome tax consultant in Banglore