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5% GST might be charged for packaged food

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New Delhi – Food products that are yet to acquire trademark would now attract 5% GST. With this decision, the government ends the exemption which these food products enjoyed earlier.

GST Council has said that they would treat the brands that have applied for the trademark of the products similar to the brands that have a trademark. The committee officials stated that they are looking for the options. The application for trademark would be treated as a trademark. This would surely call for 5% GST.

The brands that have enjoyed the benefits of registered trademark would now be charged with 5% GST. The central government would take this issue up at the meeting of Next GST Council which meets on 9th September.

Apart from this, the definition under the previous central excise regime might be included in the new taxation. The definition signifies that brand name is synonymous with the trade name. This means registered or not, both the products would be treated the same.

The exemption has been the result of concerns that some states have raised. It said that packaged foods that come with logos might involve the small scale traders. These traders sell their food products without any brand name. Such traders would take a hit in case GST gets implemented on them.

The government decided to take a closer look at the matter, and to their surprise, some well-known brands are selling products like another unregistered trademark. The discovery has led the government to reconsider the decision of exemption.

A leading company selling basmati rice said that the product falls under the GST exempt. They have gone out to unregister some products that have been registered. There are certain items including cottage cheese, wheat, natural honey, rice and other similar products that get sold packaged in a unit container and under a brand name does not attract GST.

The companies are trying to avoid the 5% GST. One Basmati rice company has changed the spelling of the product name so that GST does not get applied. However, any rice that gets sold in printed package would attract standard GST of 5%.

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Ashutosh Aggarwal
Ashutosh Aggarwal is a Founder and Editor-In-Chief at The GST Blog. He holds Bachelor Degree in commerce. He is pursuing company secretary course and chartered accountancy course. Before started this blog, He worked as an accounts manager in a reputed MNC. Also, having an experience of teaching for all subjects of commerce for five years in his study point.

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