Trade marks to fall under the residual entry under the GST

GST Registration in India bangs it way through the indirect taxation system eliminating all VATs, CSTs, Service Tax, etc. The act came into force on July 1st, 2017 and the implementation process of the same has already taken its toll.

Trademark, goodwill and other intangible assets has attracted 18 percent rate, but with certain conditions and exemptions. Such assets are not mentioned in the final schedule of the GST i.e Goods and Services Tax, published by the government, but has found its place in the residual entries.

Residual entry being that list which mentions all the names which are not mentioned elsewhere on the schedules and therefore trademark attracted a rate of 18 percent.

But not all trademarks are to be charged with such a tax rate, few on the entry attract exemption from paying the tax. The supply of ‘branded’ cereals and also which are ‘registered’ with the Registrar of Trade Marks under the Trade Marks Act, 1999 will attract a 5 percent CGST (Central Goods and Service Tax) rate but those which are unbranded and not registered will remain exempted.

The 5 percent tax rate on the branded cereals is forecasted to bring a decrease in the quality of the food grains as its rates are going to shoot up and the farmers will still not be remunerated as they should be, even if they are providing higher quality of food grains. The unbranded cereals rates will remain all time low but with a lower quality of food grains.

Amidst all the discussions and clarifications from the side of the government, the confusions and doubts still persist. There is still no express clarity made regarding whether the tax is to be charged or is it exempted on certain items.

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