With the meeting between a delegation led by AIREA President Mr. Vijay Setia and the Hon’ble Finance Minister Mr. Arun Jaitley, the issue of various definitions of branded vs. non branded rice doing rounds have been put to rest. The Finance minister categorically defined any rice being sold under a brand name, selling at a premium than the loosely sold rice, registered or not would attract GST of 5%. Also it was further clarified that any sort of labeling on the packaged rice would come under the gambit of GST. This classification banishes any theory or theories that a ‘brand’ is applied for but not yet approved under the office of controller General of Patents, Designs and Trade Marks. The claims made by top selling rice brands no longer matters, about the status or stage of approval of the Trade Mark; they would fall under the preview of GST.
KRBL Ltd that sells India Gate packaged rice, the country’s largest selling rice brand, had earlier announced in an internal communication dated 3 July that their product is exempt from paying goods and services tax (GST) because the company did not get the brand name registered under the Trade Marks Act 1999. KRBL had informed “This is to further clarify, declare and certify that ‘India Gate, Indian Farm, Lotus and Unity’ brands are owned by KRBL Ltd but since they are not registered in Class 30 under ‘Trade Marks Act, 1999’ hence ‘NIL’ GST rate is applicable on it.”
Top Rice Brands anyways had been critical of the country’s largest rice brand not paying the 5% GST that is applicable on branded staples, making their products more expensive. This included the Indian unit of McCormick and Co. which sells Kohinoor packaged rice in India. They had also raised doubts about whether the definition of “registered brand name” has been interpreted correctly by the company to claim the GST exempt status. The AIREA President Mr. Setia while speaking to Riceoutlook Magazine said a circular carrying the clarification on branded rice, given by the Finance Minister would come out soon.