Flour mills get GST exemption on branded packs with rider

In a major relief for about 1,400 flour mills, the central government has granted conditional exemption from the goods and services tax (GST) for branded pack producers of atta (wheat flour), maida (refined wheat flour) and besan (gram flour).

A finance ministry circular dated Wednesday, September 20, said the GST council in its 21st meeting on September 9 had recommended five per cent GST on branded flour. All brands registered as on May 15 and having an actionable claim or enforceable right in a court of law are covered.

However, the circular adds that the five per cent levy will not apply if the person concerned voluntarily forgoes any actionable claim or enforceable right on such brand name. For this, the brand owner would have to file an affidavit claiming to forgo the claim or enforceable right on the brand name with the jurisdictional commissioner of Central, State or Union Territory tax.

"It is a great relief to flour mills with regional brand presence and without having any actionable claim or enforceable right. Such regional players only publish a brand name on a pack to identify the packet, without much to claim on it. The government's clarification would help survival of over 1,400 flour mills that were facing stiff competition from another 500 mills with huge unbranded pack volumes," said D Manikchand Gadiya, managing director, North Karnataka Roller Four Mills.

The ministry's circular also directs brand owners to print in indelible ink, both in English and the local language, on each unit container that in respect of the brand name printed on it, he has voluntarily forgone the actionable claim or enforceable right.

Since the five per cent GST was levied on branded packs with a registered trademark, many such entities had surrendered their registrations to get out of the GST ambit.

"The government's conditional exemption was needed for survival of small but aspiring flour mills. Hence, the circular in this regard is a welcome move," said a senior industry official.

Notification Issued For GST Actionable Claim On Branded Food Products 

The GST Council, in its 21st meeting held on 9th September, 2017 at Hyderabad has, inter alia, recommended that for 5% GST rate on cereals, pulses and flours etc. put up in unit container and bearing a registered brand name: 

a) A brand registered as on 15.05.2017 under the Trademarks Act, 1999 shall be deemed to be a registered brand for the purposes of levy of 5% GST, irrespective of whether or not such brand is subsequently deregistered. 

b) A brand registered as on 15.05.2017 under the Copyright Act, 1957 shall also be treated as a registered brand for the purposes of levy of 5% GST. 

c) A brand registered as on 15.05.2017 under any law for the time being in force in any other country shall also be deemed to be a registered brand for the purposes of levy of 5% GST. 

d) A mark or name in respect of which actionable claim is available shall be deemed to be a registered brand name for the purposes of levy of 5% GST. 

2. Notification Nos. 27/2017-central tax(rate), 28/2017-central tax(rate), 27/2017-Integrated tax(rate), 28/2017-Integrated tax(rate), 27/2017-Union territory tax(rate), 28/2017-Union territory tax(rate), giving effect to the Council’s recommendations relating to changes in GST rates on goods and conditions appended thereto have been issued on 22nd September, 2017. 

3. Regarding aforesaid recommendations of the Council, these notifications, interalia, provide that 5% GST will apply if on brand name [as defined in the notification] an actionable claim or enforceable right in court of law is available. In this context, these notifications also provide that this 5% GST will, however, not apply if the person concerned voluntarily foregoes any actionable claim or enforceable right on such brand name, subject to the conditions that he: 

a) files an affidavit to the effect that he is voluntarily foregoing his actionable claim or enforceable right on such brand name with the jurisdictional Commissioner of Central Tax or State Tax, or the jurisdictional officer of Union Territory Tax, as the case may be, and

b) prints in indelible ink, both in English and local language on each such unit container, that in respect of brand name printed on the unit containers he has voluntarily foregone his actionable claim or enforceable right. 

4. The above mentioned notifications are effective from 22nd September, 2017. 
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Dear sir,
I am in a confusion to decide whether i have actionable claim against my name or marks. (Brand).
I have given it for registration in 2012 but as on today the application status is "Refused".
I have been using TM simbol since 2012.
Please guide me how to decide whether i have actionable claim against my name or marks(Brand).