Applicability Of GST On Brand Name

• Published date: 05 May 2021
• Subject Matter: Tax, Sales Taxes: VAT, GST
• Law Firm: LexCounsel Law Offices
• Author: Ankit Kanodia

Applicability of GST on Brand Name

In the Matter of: Sarvasiddhi Agrotech Pvt. Ltd. [WP(C) No. 279/2021]

Forum: High Court of Tripura

Order Delivered on: April 20, 2021

Factual Background: The petitioner is a registered company engaged in supply of Non-Basmati unbranded rice in the State of Tripura. A search was conducted at the godown (warehouse) of the petitioner which resulted in seizure of documents and stock of rice lying in godown having certain brand name. The adjudicating authority issued a show cause notice in which it alleged that petitioner was engaged in manufacturing, packaging and supply of branded rice having different product names in unit containers without payment of GST. The petitioner claimed that the stock lying in the godown was for internal (grading) purpose and not for taxable supply and was meant to be returned due to quality disputes. Demand under Section 74(9) of the Central Goods and Service Tax Act, 2017 ('CGST Act'), penalty under Section 74(1) of the CGST Act and interest under Section 50(1) of the CGST Act was levied considering the invoices and bill of supply produced by the petitioner. The petitioner's contention was that the brand was not a registered brand and therefore the petitioner was not liable to taxes. The demand was confirmed by both the adjudicating authortiy as well as the first appellate authority and since the Goods and Service Tax Appellate Tribunal is yet to be formed, the petitioner approached the Hon'ble High Court of Tripura.

Judgment: The Hon'ble High Court while admitting the petition held as below:-

1. The invoices and other sale details given by the petitioner were clearly establishing the evidence that the petitioner had supplied rice in packages which carried brand name.

2. The conclusions drawn by the lower authorities were on the basis of assessment of materials and the petitioner's ground of stock lying in the godown for internal purpose was not backed by any evidence.

3. Lastly, the petitioner's contention that the brand was not a registered brand and therefore the petitioner had no liability to pay tax also was rightly not accepted as Notification dated September 22, 2017 amended the previous Notification for the original expression of "put up in unit container and bearing a registered brand name". What is now substituted is that it...