After announcing a levy of 5 per cent GST on branded foodgrains such as cereals, pulses and flour, the government on Wednesday said those businesses who want to deregister their brand for availing the benefit of lower GST rate will have to file an affidavit before the tax commissioner about foregoing his actionable claim or enforceable right on the brand. The businesses will also have to print in indelible ink in English and the local language on each such branded unit container that it has voluntarily foregone actionable claim or enforceable right on the brand, a finance ministry statement said.
Unbranded foodgrains like cereals and pulses are exempt under the new indirect tax regime of Goods and Services Tax (GST) which was rolled out from July 1. However, packed foodgrains put up in unit container bearing a brand name attract 5 per cent levy. “A mark or name in respect of which actionable claim is available shall be deemed to be a registered brand name for the purposes of levy of 5 per cent GST,” the finance ministry said, adding that the provision would be notified on September 22.
Since the introduction of GST, it had come to the notice of the tax department that many businesses had been deregistering their brands to avail the benefit of exemption under GST. Following that, the GST Council had earlier this month decided that a brand registered as on May 15, 2017, shall be deemed to be a registered brand for the purposes of levy of 5 per cent GST, irrespective of whether or not such brand is subsequently deregistered.
Also, any brand registered as on May 15, 2017, under the Copyright Act, 1957 shall also be treated as a registered brand for the purposes of levy of 5 per cent GST. Meanwhile, according to a PTI report the commerce ministry has amended certain provisions related to duty exemption procedures to bring them in line with the GST regime.
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