GST has been  a hot topic of discussion from the date it was launched. The main reason behind the same is  ambiguity regarding numerous provisions of law.  In order to ensure the creditworthiness of the govt across the world , the govt. could not delay the applicability of law but which finally created a scenario where on every other day the rates and the provisions of GST are changing .

Talking about the MILLING INDUSTRY which is highly resistant regarding the provisiosns of GST have their own sad story. Prior to the applicability of GST they enjoyed the various exemption benefits  provided by central and state govt under Excise, Vat and Service tax laws. But GST have become a pain in the arse for them since the govt tried bifurcating their products on the basis of branding. Govt through its central tax rate notification no. 1/2017 levied  2. 5% CGST and similar provisions were applicable in UTGST and SGST Act too which consolidated for a tax burden of 5% on the sale of products which are packed in units or containers bearing a Registered brand name or Trade Mark . Govt further through its notification no. 1/2017 dated 28.06.2017 clarified  that a mark, symbol, monogram, label, signature, invented word which is registered under the Trade Mark Act 1999 shall be treated as a brand name after which most of the traders and manufacturers related to milling industry were operating through their unbranded products and getting their brand names unregistered.

The above said problem did not end up there rather a situation of hue and Cry was created when govt. announced that those who are getting their brands unregistered to avoid tax will also come under the purview of GST soon  as per the amended definition. And the amendment would be made applicable retrospectively which was the biggest challenge for this industry about how to collect the tax on the products already sold without taxes In the mean time new rumors were also hitting the market that a person who is operating in both registered and unregistered brand name will be taxed on the aggregate value of the products which brought a situation of shut down for many small and medium traders and manufacturers in  this industry.

But GST council after its 21st meeting held at Hyderabad on 22nd september through a press release clarified that the amended definition will be applicable prospectively and not retrospectively. In addition to this a major relief was also given as the govt. provided an option of not paying the taxes to the people who were unregistering their brand names provided they would voluntarily give up any kind of actionable claim associated with their brand names with the following 2 conditions

  1. An affidavit will be required to be submitted to the jurisdictional commissioner of the central tax /state tax and jurisdictional officer  of UT clearly mentioning the line that he has voluntarily foregone its his actionable claim or enforceable right  of the concerned brand name.
  2. The above line about forgoing of the actionable right for the unregistered brand name will also be printed on each unit and container of the product.

Thus we can say that the time has come when the dust has settled …

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Qualification: CA in Job / Business
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Location: DELHI, New Delhi, IN
Member Since: 29 Aug 2017 | Total Posts: 3

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    i appreciate your views sir, even my view is that the tax rate for branded products should be reduced.. thanks for your time devoted to read this post


    The very concept of differentiating the branded and unbranded products is based on wrong notion. Businesses brand products to give confidence to public that they will get quality product if branded. Government wants to tax branded products is totally unfair as businesses create brand and spend money on brand building which ensures quality products for masses. Government’s action in taxing/keeping branded products at disadvantageous position is an effort like depriving public from enjoying quality products. This inadvertently goes against public interest. Government should rather give some beneficial treatment to branded products.

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April 2021