Fake Brands of Packaged Food, Flood Market, Thanks to GST

Fake brands flood market due to GST

With the packaged food industry enduring a shot because of the GST trouble, organizations from crosswise over India connected for deregistration in an offer to get away from the tax expense. Well, known trademarks went off the rack overnight and makers started offering items under new, unregistered trademarks.

The GST Council in September issued an illumination saying registered brands as on May 15, 2017, would draw in impose regardless of whether they are deregistered later and be saved the exact just if makers do without significant claims on their brand names.

This move of the council has confused the packaged food industry. Brand proprietors pulled back applications for deregistration and surrendered guarantee over brand names. The brand logos on the bundles offered a route to the declaration: “We have deliberately done without significant claim or enforceable appropriate on this brand.”

A 1kg pack of unique Shivaling tur dal costs Rs. 70, while its copy is being sold at Rs. 60. According to Mr. Jayesh Mehta, executive of Gujarat-based Shivaling Marketing, which offers tur dal, urad and gram dal under Shivaling brand name, “We have lost more than half of our business to this phoney brand. We were sending 60 truckloads (each with 16 metric tons) of tur dal a month to Karnataka. Presently, it has come down to 25.”

Shedding light on the issue, Mr. Rameshchandra Lahoti, administrator of Wholesale Food Grains and Pulses Traders Association said, “There is presently an indirect permit to offenders to copy presumed brands. The innocent buyers might be cheerful their most loved brands are accessible at less expensive costs, however, they don’t know they are phoney ones. Buyers can’t look for help in the event of any issues with their buys.” As indicated by him, not very many players and enormous corporates who are certain of their brand equity, have held their trademarks and remained in the GST net.

Also, speaking on the matter, Mr. Vishaldas Tapadiaya, managing director of Kalaburagi-based Mysore Industries offering pulses and dal under Nandi trademark, said his organization has sworn off the rights over the brand it had sustained since 1974 and the disclaimer is being imprinted on the package. “It was difficult to do without the brand we had worked over decades. Be that as it may, we couldn’t manage the cost of misfortunes for the brand. Our item had turned out to be costly after the Center characterized the branded packaged food under 5% GST piece,” Tapadiya said.

“Duplication of brands was a threat before as well; it has turned out to be more uncontrolled under GST. The law now is designed to the point that culprits can without much of a stretch escape punishment,” Mehta included.

“The rationale of taxing branded food was that manufacturers were selling them at a higher cost when compared to unbranded commodities. Sadly, copy brands are presently flourishing; the GST Council is relied upon to examine this issue at its meeting later this month,” said Mr. D P Nagendra Kumar, chief commissioner of GST, customs and central excise.

“The best thing is to exclude all kinds of food commodities from the tax expense, as it was in VAT administration. In the event that the government needs differential tax t rates for branded and unbranded food, at that point it can put branded food under the unique 1% slab. We have sent a portrayal to this impact to the Council,” said B T Manohar, chairman of state tax collection board of FKCCI (Federation of Karnataka Chambers of Commerce and Industry) and a member from the GST advisory committee to the government of Karnataka.