In re M/s. Aditya Birla Retail Ltd. (GST AAAR Maharashtra)
Appellate authority held that the use or words ‘VALUE’,‘CHOICE’ or ‘SUPERIOR’ on the proposed packing, without altering the surrounding environment to take advantage of brand ‘MORE’, would be construed as ‘brand name’ for the purpose of Exemption Notification.
Also Read AAR Ruling- GST AAR: Mere mentioning Aditya Birla name on Cereal packs to be construed as bearing brand name
FULL TEXT OF ORDER OF APPELLATE AUTHORITY FOR ADVANCE RULING, MAHARASHTRA
At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the MGST Act.
The present appeal has been filed under Section 100 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as “the CGST Act and MGST Act”] by M/s Aditya Birla Retail Limited (herein after referred to as the “Appellant”) against the Advance Ruling No. GST-ARA-13/2017/B dtd.23.03.2018.
BRIEF FACTS OF THE CASE
A.Aditya Birla Retail Limited (‘the Appellant’) is inter alia engaged in the processing and/or trading of a wide range of cereals, pulses and flour classifiable under Chapter 10 of the First schedule to the Customs Tariff Act, 1975 (‘subject goods’). The subject goods are sold by the Appellant at its supermarket and hypermarket format stores, namely ‘More Stores’, located in various states, including Karnataka, Andhra Pradesh, Delhi, Kerala, Maharashtra, Telangana, Tamil Nadu, West Bengal, Punjab, Haryana, UP, MP, Chandigarh and Puducherry.
B. The Appellant sells the subject goods under the following brand names, ‘More for you’, ‘More Selecta’ and ‘More value’ (collectively referred to as ‘More trademarks’), which are registered trademarks (in the name of the Appellant) under the Trade Marks Act, 1999 (‘the Trade Marks Act’). Further, the packaging of the subject goods also bears the ‘AdityaBirla’ logo which is the registered trademark of Aditya Birla Management Corporation Pvt. Limited, under the Trade Marks Act, which trademark has been licensed to the Appellant for specified purposes. The subject goods are presently sold from its ‘More Stores’. The brand name ‘More’, pertaining to such ‘More Stores’, is also registered under the Trade Marks Act. However, from the ‘More’ stores, several categories of products, manufactured by different companies, are also sold. Such products may or may not be bearing a brand name.
C. The subject goods are either processed and packed ‘in-house’ by the Appellant (Stream 1) or are procured in processed and packed form from third party vendors (Stream 2). The modus operandi followed by the Appellant in respect of the said transaction streams, and, the nature of details disclosed on the packaging of the subject goods under such streams is as follows:
(i) Stream 1- Subject goods processed and packed in-house by the Appellant:
The Appellant procures unprocessed food products from various vendors and undertakes processing and packing in its own units. Such processing would generally involve sorting, quality assessment, grading etc. The subject goods would thereafter be sold by the Appellant from its More Stores.
The package of subject goods sold by the Appellant under Stream 1 inter alio bears the name of the Appellant as being the manufacturer and the registered trademarks viz. ‘More trademarks’ and the ‘Aditya Birla’ logo. The package also bears a telephone number and an email address, for being contacted in case of consumer complaints.
(ii) Stream 2- Subject goods are procured by the Appellant in processed and packed form from third party vendors:
Unprocessed food products are procured by third party vendors and subsequently processed and packed, in terms of the quality standards fixed by the Appellant. The subject goods are thereafter procured by the Appellant for being sold from its More Stores.
The package of subject goods sold by the Appellant under Stream 2 inter alia bears the name of the manufacturer, the declaration ‘Marketed By-Aditya Birla Retail Limited’ and the registered trademarks viz. ‘More trademarks’ and the ‘Aditya Birla’ logo. The package also bears a telephone number and an email address, for being contacted in case of consumer complaints.
It is relevant to note that some of the subject goods are sold by the Appellant in different quality variants, determined based on various parameters including the quality or size of grains or seeds, nature of processing undertaken, nutritional content, sourcing, etc. It therefore becomes essential for the Appellant to have appropriate disclosures on the package of such subject goods so as to enable the customers to identify and buy products based on their requirements, budget and preferences. Therefore, in respect of such subject goods, under both streams, the package also bears a declaration which acts as a quality indicator (e.g. whether the product is of standard quality, premium quality or superior quality).
D. In the State of Maharashtra, the Appellant sells the subject goods under Stream 1 and Stream 2 from around twenty five More Stores located across the State. As regards the subject goods under Stream 1, the same are either processed at its processing unit located in Pune or are sourced from processing units located in other States. As regard the subject goods under Stream 2, the same are procured from various third party vendors located within or outside Maharashtra.
E. In terms of the present packaging adopted by the Appellant for the subject goods sold by it under both Stream 1 and Stream 2, the same inter alia bear the trademarks registered under the Trade Marks Act, viz. ‘More trademarks’ and the ‘Aditya Birla’ logo. In terms of the relevant entries under Schedule 1 to Notification No. 1/2017-Central Tax (Rate) dated 28th June 2017 (‘CGST Rate Notification’), and, corresponding entries under Schedule 1 to Notification No.1/2017-lntergrated (Serial no. 46, 48, 50, 51, 53) tax, dated 28th June 2017 (‘IGST Rate Notification’) and under Schedule 1 to Notification No.1/2017-State tax, dated 29th June 2017 (‘SGST Rate Notification’), the supply of subject goods, when put up in unit containers and inter alia bearing a ‘registered brand name’, attract GST at the rate of 5%. The Appellant, in respect of supply of the subject goods under either streams, is presently discharging GST at the rate of 5%.
F. It is relevant to note that the requirements to (a) have specific declaration on the package of the subject goods, as regards its manufacturer, and, (b) to provide contact details in relation to consumer complaints (customer care related details), are statutory requirement in terms of the Legal Metrology Act, 2009 read with the Legal Metrology (Packaged Commodity) Rules, 2011, and, the Food Safety and Standards Act, 2006 read with Food Safety and Standards (Packaging and Labelling) Regulations, 2011, the relevant extracts of which legislations [collectively referred to as ‘Subject Statutory Provisions’] are provided below-
