Tax implications to milk collection dairy

Others 1630 views 3 replies

Hello Experts,

I am Haresh from Bhavnagar,(Guj).

My father runs a Milk Collection Dairy in a village.

I have queries regarding Laws applicable and Taxation matters.

Working Procedure is as follows:

1.First we are private Dairy, not a Sahakari Mandali Branch.

2.We collect milk from farmers.

3.No precessing is done to milk.

4.We are having household consumer to whom we supply milk by going to their houses.

5.Excess milk is supplied to Brand Dairy like Mother Dairy,Amul Dairy,Madhur Dairy..Ect.

6.Monthly turnover is approx. 2 to 3.5 Lacs.(Payment to Farmers on purchase of Milk from them.)

7.We dont pay an Income Tax as we are engaged in agricultural activity also.(Our main work area farming.)

 

My questions are:

1.What is the nature of this trading?Can we call it as a proprietory concern?

2.Is VAT applicable to this commodity?

3.Is there any compulsone to get registered under Food Department?

4.Is there any legal requirement to get license to sale Milk.

5.What are the legal rules to follow/apply in trading this commodity?

6.What are the tax implications?

7.What to do if I want to creat a Brand of my own?How to register a brand?(I want to sale my own brand in Packing)

8.What are the consequences if I creat my own Brand to the Laws and Taxation matter. 

 

I am very very big fan of this expert Zone.Hoping Positive and early reply in full details.

Thank You,

Regards,

Haresh Jambucha

B.com,Inter CA.

Replies (3)

It is a commercial activity. You will require a shop & establishment license or ghumasta. You will require VAT regsitration. You also require registration license with FDA (food and drug administration). Without a license you cannot sell milk and cannot have a brand on the packing. You need to hire a CA who will manage your yearly filing of ITR.

@ Mihir:Thank You Mihir.

As per my knowledge VAT is not applicabile to Milk as its Neccesity Commodity.Is it still requires to get registered under VAT?

Yes, as per schedule - 1 of VAT, milk is exempt from vat, but not milk powder/foods.


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