2018 (5) TMI 700 - AAR - GST

Goods with Common Terms Not Exempt from GST

In Re: M/s. Aditya Birla Retail Ltd.

In Re: M/s. Aditya Birla Retail Ltd. - 2018 (12) G. S. T. L. 403 (A. A. R. - GST) Issues Involved:1. Whether the subject goods sold under Stream 1 can be considered as 'not bearing a brand name' and eligible for GST exemption.2. Whether the subject goods sold under Stream 2 can be considered as 'not bearing a brand name' and eligible for GST exemption.3. Whether the use of common/generic terms like 'Value', 'Daily', 'Superior', and 'Choice' on the package can be construed as a 'brand name' for GST exemption purposes.Detailed Analysis:Issue 1: Subject Goods Under Stream 1Question: Whether the subject goods, proposed to be sold under Stream 1, where the package of the subject goods would merely have a declaration mentioning the name and registered address of the Applicant as the manufacturer, can be considered as 'not bearing a brand name' and eligible for exemption from GST.Analysis:- The applicant contends that mentioning the manufacturer's name and address as per statutory requirements does not constitute a 'brand name'.- The relevant GST Notification exempts goods that are not put up in unit containers and do not bear a registered brand name.- The definition of 'brand name' includes any name or mark used to indicate a connection between the goods and the person using the name or mark.- The applicant's name 'Aditya Birla Retail Limited' is a well-known brand associated with quality and trust.- The Supreme Court decision in CCE v. Grasim Industries Ltd. states that even the name of a company can be considered a brand name if it indicates a connection in the course of trade.- The goods sold under Stream 1 would be available only in More Stores, which are associated with the Aditya Birla brand.Judgment: The subject goods sold under Stream 1 are considered to bear a brand name and are not eligible for GST exemption. (Answered in the negative).Issue 2: Subject Goods Under Stream 2Question: Whether the subject goods proposed to be sold under Stream 2, where the package of the subject goods would have a declaration mentioning the name and registered address of the manufacturer and the declaration 'Marketed by- Aditya Birla Retail Limited', can be considered as 'not bearing a brand name' and eligible for exemption from GST.Analysis:- The applicant argues that the declaration 'Marketed by Aditya Birla Retail Limited' does not amount to branding.- The relevant GST Notification's definition of 'brand name' includes any name or mark indicating a connection in the course of trade.- The name 'Aditya Birla Retail Limited' and the association with More Stores create a brand identity.- The Supreme Court in CCE v. Australian Foods India (P) Ltd. emphasized that even if a brand name does not appear on the product, the environment in which it is sold can establish it as a branded product.- The goods under Stream 2 are sold exclusively in More Stores, reinforcing the brand connection.Judgment: The subject goods sold under Stream 2 are considered to bear a brand name and are not eligible for GST exemption. (Answered in the negative).Issue 3: Use of Common/Generic TermsQuestion: Whether the declarations made on the package using common/generic terms like 'Value', 'Daily', 'Superior', and 'Choice' for indicating the quality of the product can be construed as a 'brand name' for GST exemption purposes.Analysis:- The applicant uses these terms to indicate product quality and not as a brand name.- The GST Notification defines 'brand name' as any name or mark indicating a connection in the course of trade.- The terms 'Value', 'Daily', 'Superior', and 'Choice' do not inherently indicate a connection to the applicant.- However, the context in which these terms are used (i.e., in More Stores) may influence their interpretation.Judgment: The question cannot be raised in isolation and must be considered in the context of the answers provided for Streams 1 and 2. (Refer to the answers in respect of Streams 1 and 2).Conclusion:- For both Streams 1 and 2, the goods are considered to bear a brand name and are not eligible for GST exemption.- The use of common/generic terms must be evaluated in the context of the overall branding and marketing environment.