FinMin clarifies definition of ‘branded’ items for GST

Product name should be registered under Trade Marks Act

Unbranded food items are GST-exempt while branded variants are taxed at 5%.

The Ministry of Finance on Wednesday clarified that for the purposes of Goods and Services Tax (GST) applicability, an item will be deemed to be ‘branded’ if it carries a brand name or trade name that is registered under the Trade Marks Act, 1999.

The Ministry was trying to allay the confusion around the definition of a branded product, since several unbranded food items are exempt from GST while their branded variants fall in the 5% tax bracket.

“Doubts are being raised as to the meaning of registered brand name,” an official statement said. “In this context, the notification… 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,” the statement added.

The GST rate on the supply of food items, such as channa or paneer , natural honey, wheat, rice and other cereals, pulses, and the flour of cereals and pulses, is nil. The rate on these items, when placed in a unit container and bearing a registered brand name, though, is 5%.