The Authority for Advance Rulings (AAR), Mumbai recently held that package of goods bearing the name and registered address of the manufacturer as per statutory requirements if conveys a connection to its brand name cannot be considered as ‘not bearing a brand name’ and is thus ineligible for exemption of GST in terms of entries to the Exemption Notifications.
The applicant, Aditya Birla Retail Limited, is engaged in the processing and trading of wide range of cereals, pulses and flour. These goods are sold though their supermarkets and hypermarkets in various States. The applicant sells these goods under brand names like ‘more for you’, ‘more selcta’. The packaging is done by the Applicant as well as a third party. The packaging also contains the logo of the applicant. The goods are in various qualities and for easy identification of goods, the applicant also uses a declaration in the package which acts as a quality indicator. The applicant as per various notifications issued under the GST regime which provide that supply of subject goods when put up in unit containers and bearing a registered trade name attract GST at the rate of 5%, is discharging GST at the said rate.
As per various Packaging Regulations the applicant is statutorily required to have specific declaration on the package of the subject goods. The applicant thus proposed to change its packaging by removing the registered trademarks of the applicant and merely mentioning the details of the applicant as the manufacturer and with a declaration “Marketed by Aditya Birla Retail Limited”. It would also contain a quality indicator, so as to enable the customers to identify the various quality products of the applicant. The applicant has sought an advance ruling on the question of applicability of certain Notifications, which require packaging to bear the registered brand name of the manufacturer, in respect of the goods intended to be sold by the applicant in the proposed packaging.
The applicant contends the applicability of certain entries in Notification No.2/2017 which exempts the goods enlisted therein which doesn’t bear brand names and not sold in unit containers from the applicability of the GST. The applicant argued that the mention of the name of the applicant is with regard to the mandatory requirements of some other statutes and therefore the goods being supplied by the applicant would not be considered as branded.
The Authority comprising of Members B.V. Borhade & Pankaj Kumar found that the applicant’s goods are being supplied through its stores which is a registered brand irrespective of whether or not the brand would be subsequently deregistered and that the name “Adithya Birla Retail Limited” also appear on the unit container. The Authority relying on the decision of the Supreme Court, wherein it had observed that whether the brand name appears or does not appear at all cannot be chief criterion; primary focus has to be on whether an indication of connection is conveyed in the course of trade between such specified goods and some person using the mark, held that the applicant would not be eligible for the benefit under the Exemption Notification.
Subscribe Taxscan Premium to view the Judgment
