GST on Branded items

GST on Branded items

Summary: Any packed goods, which are having a name or label printed on the packing and such name if having status as registered then the 5% GST attracts.

Traders who are having registered trademark are more worried about the 5% GST announcement on food products. Most of them even thinking of removing their registered trademarks from the Trademark Registry by making a withdrawal of the Registered Trademark.

My suggestion to the Registered Trademark owners would be, you may hold on to the registered trademark and make it a practice to pay 5% GST. Because, when you don’t sell anything with the brand name, it is highly possible that someone makes a copy of your brand and sell his product, you will not have protection. Additionally, your market share may come down. The brand is the key for identification and protection of trade identity. In case you aim for short-term cost cutting or profits, you may withdraw but your brand, certainly your brand and market share may get diluted.

Subject :
As per the latest announcement made by the Finance Ministry on 05.07.2017, the scenario is clear that any goods printed and sold with the Registered Trademark would attract 5% GST.

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Finance ministry explains.

The meaning of a registered brand name in the context of GST rates; CGST rate of 5% will not be applicable on the supply of goods unless the brand name or trade name is actually on the Register of Trade Marks and is in force under the Trade Marks Act, 1999.  [ Which means goods sold having an unregistered trade or brand name would not attract 5%] 

The Central GST (CGST) rate on supply of certain goods, such as chena or paneer, natural honey, wheat, rice and other cereals, pulses, flour of cereals and pulses, other than those put up in unit container and bearing a registered brand name, is NIL. Supply of such goods, when put up in unit container and bearing a registered brand name attracts 2.5% CGST rate. [ Unit container means anything pre-packed with a registered name] [CGST 2.5%] Please refer below what means a unit container. 

Doubts are being raised as to the meaning of the registered brand name. In this context, the Notification No. 1/2017-Central Tax (Rate), dated 28th June, 2017 [which notifies the CGST rates of intra-state supply of goods] and Notification No. 2/2017-Central Tax (Rate), dated 28th June, 2017 [which exempts intra-state supply of the specified goods] clearly defines “registered brand name” as brand name or trade name, which is registered under the Trade Marks Act, 1999. In this regard, Section 2 (w) read with section 2 (t) of the Trade Marks Act, 1999 provide that a registered trade mark means a trade mark which is actually on the Register of Trade Marks and remaining in force.

Thus, unless the brand name or trade name is actually on the Register of Trade Marks and is in force under the Trade Marks Act, 1999, CGST rate of 5% will not be applicable on the supply of such goods.

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What is mean by unit Container?
(i) The phrase “unit container” means a package, whether large or small (for example, tin,
can, box, jar, bottle, bag, or carton, drum, barrel, or canister) designed to hold a predetermined
quantity or number, which is indicated on such package.What is mean by Registered Band name ?
(ii) The phrase “registered brand name” means brand name or trade name, that is to say, a
name or a mark, such as symbol, monogram, label, signature or invented word or writing
which is used in relation to such specified goods for the purpose of indicating, or so as to
indicate a connection in the course of trade between such specified goods and some person
using such name or mark with or without any indication of the identity of that person, and
which is registered under the Trade Marks Act, 1999
[ (w) “registered trade mark” means a trade mark which is actually on the register and remaining in force;
(t) “register” means the Register of Trade Marks referred to in sub-section (1) of section 6;6.-(1) For the purposes of this Act, a record called the Register of Trade Marks shall be kept at the Head Office of the Trade Marks Registry, wherein shall be entered all registered trade marks with the names, addresses and description of the proprietors, notifications of assignment and transmissions, the names, addresses and descriptions of registered users, conditions, limitations and such other matter relating to registered trade marks as may be prescribed. ]
Goods with Brand Name, packed unit container that attracts 5%.

0406  Chena or paneer put up in unit container and bearing a registered brand name
0409 Natural honey, put up in unit container and bearing a registered
brand name
0713 Dried leguminous vegetables, shelled, whether or not skinned or
split [put up in unit container and bearing a registered brand name]
10 All goods i.e. cereals, put up in unit container and bearing a
registered brand name
1001 Wheat and meslin put up in unit container and bearing a registered
brand name
1002 Rye put up in unit container and bearing a registered brand name
1003 Barley put up in unit container and bearing a registered brand name
1004 Oats put up in unit container and bearing a registered brand name
1005 Maize (corn) put up in unit container and bearing a registered brand name
1006 Rice put up in unit container and bearing a registered brand name
1007 Grain sorghum put up in unit container and bearing a registered brand name
1008  Buckwheat, millet and canary seed; other cereals such as Jawar, Bajra, Ragi] put up in unit container and bearing a registered brand name
1101 Wheat or meslin flour put up in unit container and bearing a registered brand name.
1102 Cereal flours other than of wheat or meslin i.e. maize (corn) flour, Rye flour, etc. put up in unit container and bearing a registered brand name
1103 Cereal groats, meal and pellets, including suji and dalia, put up in unit container and bearing a registered brand name
1105 Meal, powder, flakes, granules and pellets of potatoes put up in unit container and bearing a registered brand name
1106 Meal and powder of the dried leguminous vegetables of heading 0713 (pulses) [other than guar meal 1106 10 10 and guar gum refined split 1106 10 90], of sago or of roots or tubers of heading 0714 or of the products of Chapter 8, put up in unit container and bearing a registered brand name
3101 All goods i.e. animal or vegetable fertilisers or organic fertilisers put up in unit containers and bearing a brand name
2202 90 90 Tender coconut water put up in unit container and bearing a registered brand name

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