CHANDIGARH: Seeking all rice brands to be brought under the 5 per cent GST, the registered basmati brands are terming the levy as discriminatory in the current version. The companies claim that distributors and retailers will prefer unregistered brands to evade GST.
The opposition to GST is also sparked as top basmati brands like Dawaat and India Gate fall in exempted list while several small players have come under the ambit of the tax. Under GST rice brands that are registered under Mark Act 1999 have come under 5 per cent GST while unregistered brands have been extended exemption.
In a letter to the union finance minister Arun Jaitely, owners of Amritsar based leading rice brand 'Lal Qila' of Amar Singh Chawal Wala has said that the tax is contrary to 'One Nation One tax'. "It would promote registered companies to float unregistered companies to evade tax," Arvinder Pal Singh, director, Amar Singh Chawal Wala told ET. He maintained that no trader in India is ready to stock and sell registered branded rice products as they would like to be out of GST.
"The tax will affect domestic sale and also reflect in exports," Arvinder Pal Singh, director, Amar Singh Chawal Wala told ET.
Many basmati brands with high volumes and sale are still not registered due to infringement issues. Rice major KRBL Limited on 3rd June 2017had maintained that its premium rice brands India Gate, Indian Farm, Unity and Lotus are not registered in class 30, under the Trade Marks Act, 1999 hence nil GST is applicable on it.
All India Rice Exporters Association (AIREA) has raised the matter with GST Council and sought clarity over ambiguity about the purview of GST on rice companies. "We are expecting more clarity over the purview of GST on registered as well as unregistered rice brands shortly," Rajen Sudershan told ET.
Presently, less than 10 per cent brands are registered with Trade Mark Act 1999 and some leading brands are unregistered due to trade mark infringement issues. "Many unregistered brands fetch high premium and volume but will now get relaxation under GST," he said. "The tax would look discriminatory in current version and defeats endeavor to build domestic brands and quality," Vijay Sethia former president AIREA. He said that several brands with comparatively lower volume would also be taxed.
Several beneficiary will include companies with over turnover of over Rs 2000 Crore as their brands are not registered with Trade Mark Act 1999 due to some Legal and Technical issues," Ashok Sethi, past president Rice Millers and Exporters Association, said.