Byte on while staying informed about the latest tax updates.
Uruguay just opened its arms to wealthy foreigners looking for a new home. From July onwards, foreigners who are living for 60 days and owning real-estate valued (currently) at USD 378,000 will qualify for tax residency.
Do you think this is a good move to attract wealthy businessmen wanting to invest in the country?
This Week’s Dose-
- Disney- Not So Magical
- Roti vs Parota- The GST War
- Beer market gets Bitter?
Disney- Not So Magical
Disney sued Florida based Orange County over Property Taxes – well, that doesn’t sound magical! On June 14, 2020 This magical kingdom found its villain in the Property Appraiser Rick Singh. Singh listed the assessed values for 2019 of the Magic Kingdom as follows:
– Walt Disney World Resort, Florida aka. the world’s busiest theme park – at USD 504 million
– Hollywood Studios was assessed at around USD 394 million
– Animal Kingdom made it at around USD 435 million
– Walt Disney’s Theme Park, Epcot, was valued at about USD 539 million.
Disney has made it clear that they have sued the said person because it “challenges errors in these assessments”. Interestingly, the Appraiser said that the Disney Complex has been undervalued for years now. And it turns out, our guy Rick Singh has been getting sued by Disney since 2015 or prior over the same issue- ill-valuation of Disney Properties in Florida. At one point he had as many as 33 cases filed against him by Disney alone! Is Rick Singh taking a stance to make Disney pay more property taxes to the state which might be long overdue?
Do you think Disney will win this like its every other Good v/s. Evil battle, or are we misguided about who is the villain here?
Roti vs Parota- The GST War
Frozen ready to eat Parotas will now attract more GST at 18%. It was isolated from the group of rotis, khakhras and chapatis which attract a GST of 5%. CBIC released a series of tweets saying, “The authority has decided that frozen (and preserved) wheat Parota and Malabar Parota available in ambient and frozen form with a shelf life of 3-7 days is not plain roti but is a distinct product“.
The extended war
One reason to shift to GST was to put an end to ‘classification’ disputes. But the load of rates in the GST regime has ensured that these disputes continue.
Is Kit-Kat a biscuit or a chocolate? Was Fryums a papad, Marico’s Parachute was a hair oil or just coconut oil and was Dabur’s Lal Dant Manjan a tooth powder or a medicinal drug? And finally, is Tendulkar a cricketer or an actor (pun intended). And now Roti and Parotta have been pitted against each other.
The product categorisation exercise still continues to be work-in-progress.
Beer market gets Bitter?
As India faces the lockdown due to Covid 19, beer prices have gone up from 10 to 75% across states. A dire attempt to raise revenue. The 28 million hectolitre industry is already facing a sharp decline in volume since March.
In the midst of this, Kartikeya Sharma, president, South Asia, Anheuser Busch InBev (as reported by Telegraph) said, “Beer is a moderate alcohol beverage. However, in India, unlike the rest of the world, it is taxed 60 per cent higher than hard spirits, despite it having vastly lower alcohol content. This puts beer at a considerable cost disadvantage. To accelerate growth for an otherwise crippled sector, the government should explore the possibility of delinking the beer sector from the hard liquor industry along with introducing a central taxation policy.”
Countries like Belgium, France and Germany charge taxes based on the volume of alcohol content. Beer has an alcohol content of 4 to 6% compared to whiskey or vodka or rum which has 48% alcohol content. And so the prices for hard liquor shoot up almost five or six times compared to beer.
Yes, this would definitely promote moderation in drinking behavior but the government might suffer a setback in revenue collection.
What’s Happening- Tax Updates
June 30 Due Date extensions- Due to Covid-19, a bunch of Income Tax, GST & TDS due dates were extended till end of June. Last couple of days left before the extension ends. Check out where the Income Tax, TDS and GST due date extensions are applicable.
The 40th GST Council Meeting was held on June 13. Have a look at the key highlights and important updates in our GST Council Dashboard.
Bands and Their Comical Costumes- Crazy Tax Story
Ever Wondered why do rock stars and singers wear outrageous clothes on stage? Well, this particular incident might help put things in place. ABBA, a Swedish pop music group, wore ridiculous clothes on stage. When recently asked about this, the band disclosed that the Swedish Tax rules allowed them to deduct those expenses as a business expense, as long as the outfits were too ridiculous to be worn off-stage.
Are you now wondering how many of such weird and particularly business-related deductions you have missed out on?
Byte of the Day
“The Income Tax created more criminals than any other single act of Government.”-Barry Goldwater