Packaged Food Market Flooded With Fake Brands To Escape GST

Posted on: Jul-2018 | By: Reports Buzz | Food & Beverage

Implementation of GST brought flourishing business for some sectors, while some had to settle with low margin sales. And the majority of the beating is taken by the food retail sector. Focusing on the packaged food segment is heavily bearing the burden. As per the regime, products with the registered trademark were attracted to high GST, so the manufacturers on priority basis replaced all the products and turned them with unregistered trademarks.

The council of GST passed a clarification stating that brands that are registered as on May 15 of this year will be liable to pay the tax, even if they later deregistered.

This move by the council has devastated the packaged food market. Brand owners gave up the claim over the brand names and applications were withdrawn.

This resulted in the deliverance of indirect license to the offenders to replicate the brands. Susceptible consumers might be delighted looking at the availability of their favorite brands at cheaper prices, which are actually the fake ones. However, in this case, consumers won't get any relief, if the consequences turned out to be unfavorable in terms of fake purchases.

Chairman of Wholesale Food Grains and Pulses Traders Association, Rameshchandra Lahoti stated that there are countable players and corporate companies who are optimistic about the brand equity, and who stuck with their trademarks and remained under the GST network.

Brand duplication was earlier a painstaking menace, and now it has turned out to be more uncontrolled under GST. The law is straightforwardly favorable for the perpetrators who can easily surpass the punishment.

Chief commissioner of GST, customs, and central excise, D P Nagendra Kumar said, “The objective of taxing renowned brands was to stop the manufacturers from selling the products at higher cost and let the unbranded commodities make the equal profits.”