CGST to apply on trademark edible goods, says govt

The Central GST (CGST) rate of 5% on edible goods will apply only on those registered under Trade Marks Act of 1999, the government said on Wednesday making it clear the ambit of branded edible items.

“The CGST rate on supply of certain goods, such as paneer, natural honey, wheat, rice and other cereals, pulses, flour of cereals and pulses is nil. However, supply of such goods, when put up in unit container and bearing a registered brand name will attract CGST at the rate of 2.5%,” the Finance Ministry said in a statement.

Thus, unless the brand name or trade name is actually on the register of trademarks and is in force under the Trade Marks Act, 1999, CGST rate of 5% will not be applicable on the supply of such goods, the ministry said.

The ministry’s clarification came amid doubts over what could be treated as branded or unbranded for sale under GST.

Premier traders’ body CAIT had appealed to the government earlier last month to come out with a notification what constituted branded edible goods.

It said that in absence of any clear cut directive, it was assumed that all packaged food will have to be taxed at 5%. Only those that come loose and sell mostly in mom & stores and roadside venders will qualify for nil tax.

The government subsequently issued a notification detailing CGST rates of intra-state supply of goods another defining “registered brand name” as brand name or trade name, which is registered under the Trade Marks Act, 1999.