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Companies may have to pay more taxes on intangible assets

Companies may have to pay more taxes on intangible assets

Some conglomerates, banks, and companies may face additional taxes under the Goods and Services Tax (GST) on their intangibles, such as goodwill, brand, logo fees and even franchise fees paid by them, following a recent adjustment in tax rates.

The government recently implemented rate parity between 'right to use' and 'transfer of right to use' under the GST framework, which will affect transactions where brand names are held in a separate business and subsidiaries are 'allowed' to use it for a fee, say tax experts.

Following the move, the tax authorities may begin investigating various groups and corporations about how much their brand names and trademarks are worth and whether or not they impose GST on the amount.

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