The Battle of Unbranded Food & Applicability of GST

Unbranded Food and Applicability of GST

GST Council has stated that branded food will attract GST. Although, the Council has not changed its stance on rate slab of 0% on unbranded food and 5% on branded food, yet this has left many traders confused about what constitutes an actionable claim.

The statement from the GST Council came to light after the brands had begun to de-register themselves and began selling under corporate names. The Council, thereby clarified that if the product has a trademark or name which entitles them to maintain actionable claim, it would be charged under 5% GST. Food items sold in open would attract no tax.

A trader from Delhi quotes, “It seems that all items, whether registered or non-registered, will be taxed … Utter confusion and chaos have been created among all the trade participants. Under (food industry regulator) FSSAI, goods are sold only with some mark or name; prices of all items will rise.”

This has left traders wondering whether having the name of a manufacturer (which is a legal requirement) attracts GST or not. However, the branded product players seem quite welcoming to the new regime and decisions of the GST Council. They believe this has given a level playing field to all the participants.

Chief Operating Officer of Adani Wilmar, Angshu Mallick quotes, “Any mark, symbol or brand name registered will pay GST. Earlier people were missing this guideline. Yes, they were using reputed names and not paying 5% GST. Now that confusion is over. You need to pay GST for using any brand name.”

This reform is believed to be beneficial for growth of industry in the long run.