Use of brand name and applicability of GST

In re M/s Abad Fisheries Pvt. Ltd (GST AAR Kerala)

Whether the frozen seafood sold in packages to institutional customers, without bearing the brand name, is eligible for exemption (NIL rate) under Notification No. 2/2017 (Central Tax Rate / Integrated Tax Rate / State Tax Rate) dtd 28th June, 2017?

No. Supply of frozen seafood in packages by a brand name holder is not eligible for exemption for the mere reason that the supply to a particular category of customers are made without inscription of Brand or Trade Name. M%.Abad Fisheries Private Limited, the applicant herein, is a registered brand name holder. The company is selling frozen sea food in packed unit containers under the brand name to retail customers and selling the same products to institutional customers without printing brand or trade name in the packet. As to the retail customers, they can choose quality products from the market on seeing the inscription of Brand or Trade Name on package. Brand name establishes a correlation between the products of the company and the minds of the consumer. But as for as an institutional customer is concerned, there is a pre-contract with the brand or trade mark holding company for supply of products to their institution. The institutional customers enter into an agreement with the supplier for the supply of frozen seafood solely for the reason that such company brand acquires distinctiveness and can supply quality products. In such situation, mere inscription of brand on the packet has no significance. However, the supply of frozen seafood in packages to institutional customers contain name of the company and contact details for customers which are statutory requirements. The presence of company name is sufficient to ensure that the product procured belongs to the ‘brand guardian’ and it cannot be considered as not bearing a brand name.

FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, KERALA

The applicant is engaged in the processing and sale of frozen seafood in India as well as export out of India. The locally caught fish are deep frozen and packed in factories and also import seafood for making domestic sales. The company sell the products through retail outlets as well as to institutional customers. Since seafood is highly perishable, and in order to preserve fish from decaying, the seafood is sold in package / unit containers in frozen form. The company is a registered brand name holder and sells the frozen seafood in packed unit containers under the brand name of “Seasparkle / Brillar / Wddfish / ABAD” to retail customers. In addition to this, they sell the seafood in packages / unit containers in frozen form without brand name to institutional customers. They have requested the advance ruling on the following:

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