Taxability on supply of Wheat/Meslin flour with Manufacturer Name printed on unit container, Goods and Services Tax - GST

[Ramesh Kumar]

Sir,

My query is: Is GST applicable on supply of wheat/meslin flour, where manufacturer name is printed on the woven bags. It is also to be noted that part of the manufacturer name is registered in trademarks Act.

Example:

Supply: Wheat/Meslin Flour - HSN 1101

Registered Brand Name printed: No

Manufacturer Name Printed: XYZ ABC Private Limited

Brand name registered in Trademarks Act: XYZ

XYZ is a famous brand and is widely known in the state.

I am aware of the provisions of Notification 2/2017 (Entry 73 - Exemption for HSN 1101), as per which supply of wheat or meslin flour other than those put up in unit container and bearing a registered brand name is exempted.

Is the brand name registered in trademarks act though not explicitly printed on bag, but which is part of manufacturer name printed in bag, amount to registered brand name in GST?

In Central Excise, there is a settled law - Tarai Foods Limited Vs CCEx. Meerut - II 2006 (4) TMI 131 - SUPREME COURT as per which name of business entity alone does not qualify as 'brand name'. Is this case applicable here also?

Awaiting for the comments of experts on the above issue.

Posts / Replies

[KASTURI SETHI]

Q.  Is GST applicable on supply of wheat/meslin flour, where manufacturer name is printed on the woven bags ?

Ans.   YES. See the definition of 'trade mark' provided under Section 2 (1) (zb) of the Trade Marks Act, 1999.Emphasis is on any connection which in the course of trade  distinguishes the goods from other goods.

Q.    Is the brand name registered in trademarks act though not explicitly printed on bag, but which is part of manufacturer name printed in bag, amount to registered brand name in GST ?

Ans. YES. See CBEC Press Release No.68/2017 dated 5.7.2017.

                                                                                                                         To be continued

[Shilpi Jain]

The provisions have changed. Pls note that brand, etc. is no more relevant to tax these goods.

[KALLESHAMURTHY MURTHY]

As per Sl No. 54 of Notification No. 1/2017 – Central Tax (Rate) dated: 28.06.2017, wheat/meslin flour put up in a 'unit container' and bearing a registered brand name attracts tax @ 5 % (CGST + SGST)

The brand name and the Trade name are different as held by Appellate Authority for Advance Ruling in the case of M/s Aditya Birla Retail Limited [2018 (8) TMI 1072 - APPELLATE AUTHORITY FOR ADVANCE RULING MAHARASHTRA].

The meaning of the registered brand name will include brands registered under the Trademarks Act 1999, Copyrights Act 1957 or any other law. The cut-off date is to be considered 15th May 2017 or any subsequent date under GST.

Notification No. 34/2017-Central Tax (Rate) and 35/2017-Central Tax (Rate) dated 13th October 2017, provided the procedure for filing an affidavit where the individual having an enforceable right or an actionable claim over the registered brand name and the person undertaking packing of the goods are two different persons. It is significant to mention that even if the brand is unregistered, there remains an enforceable right/remedy in the nature of passing off the right available to a prior user of such a brand.

As per Central Tax Notification (Rate) 06/2022 dated 13th July, 2022 [Seeks to amend notification No. 1/2017- Central Tax (Rate)]

1. (B) (viii) against S. Nos. 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 58 and 59, in column (3), for the portion beginning with the words “put up in” and ending with the words and bracket “as in the ANNEXURE]”, the words “, pre-packaged and labelled” shall be substituted;

The mentioning of the trade name of the manufacturer on the unit container is a statutory requirement in terms of Section 18 of the Legal Metrology Act 2009 read with the Legal Metrology (Packaged Commodity) Rules 2011 and Section 23 of the Food Safety and Standards Act 2006 read with Chapter 2 of the Food Safety Standards (Packaging and Labelling) Regulations 2011.

Hon’ble Supreme Court clearly held in the case of Tarai Foods Limited vs CCEx, Meerut– II [2006 (4) TMI 131 - SUPREME COURT], referred to in the query that the identity of the person cannot be considered as the brand name. Further, it was clearly stated that if the name of the manufacturer is construed to be a brand name, then there will be no unbranded product at all. It has to be something which is appended to the product. Even if one is to deliberately remove the brand name to avail the nil rate of tariff, he can still avail of the exemption.

That means the manufacturer name printed on the container/bags cannot be construed as “brand name:

As per notification No. 6/2022-Central Tax (Rate), dated July 13th 2022, GST on rice and wheat and other specified commodities will be levied at the rate of 5% if they’re sold in packaged containers.

Notification No. 2/2017 dated 28-06-2017 reads as under.

……….. hereby exempts intra-State supplies of goods, ……………, falling under the tariff item, subheading, heading or Chapter, as the case may be…..

Entry 73. 1101 Wheat or meslin flour [other than those put up in unit containers and bearing a registered brand name].

From the above versions of Notifications and Judgements, wheat /meslin flour

• Sold "put in container" with a printed trade name but not branded is exempt. (As per Judgements)
• Sold in the course of intra-state [other than those put up in unit containers and bearing a registered brand name] is exempt. (As per N.N. 2/2017)
• Sale with the label either having a brand name or trade name, put up in unit container as per amendment is taxable @5% w.e.f 18-07-2022. (As per N.N. 6/2022).
• In other circumstances taxable @5%.

Request other experts for more clarity on the issue.

[KASTURI SETHI]

Dear Sir,

(i) Brand name or trade name has not been dispensed with in GST regime for the purpose of levy of GST.

(ii) Though Press Release has no statutory force, yet it is foundation of notification or circular, it being released by the GST Council. So it is also worth reading here.

Branded Food Products — Recommendation dated 9-9-2017 by GST Council for changes in GST Rates and filing of affidavit regarding foregoing of actionable claims or rights on brand names

C.B.E. & C. Press Release No. 98/2017, dated 20-9-2017

[KASTURI SETHI]

Dear Sh.Murhy Ji,

The issue raised by you is challenging and thought provoking.

There are common features between the terms, 'Brand name' and 'Trade name'. These are  :

(i)  Both distinguish the goods from other goods.

(ii) Both protect the goodwill and reputation of the company. 

These facts cannot be ignored.

To be continued.