GST on usage of trademark by India Co

[Abhijeet Mane]

Dear Experts,

One India Company has entered into a distribution agreement with their holding company located in the USA; as per the agreement, the India Company is liable to import and supply goods in India. Per the agreement, the India Company is allowed to use any registered or unregistered trademarks owned by the holding company; no royalty is paid by the India Company.

Can you please let us know the GST liability with some relevant legal references or case law?

AI Summary

Import of services: usage of foreign holding's trademark by Indian company attracts GST under reverse charge unless contract precludes supply.
Use of a foreign holding company's trademark by its Indian subsidiary is generally an import of services taxable under the reverse charge mechanism where the place of supply is in India; CBIC guidance treats separate establishments as distinct persons and Notification 10/2017 supports RCM applicability. Absence of royalty payments does not automatically avoid GST. However, if trademark use is strictly incidental to exclusive distribution of imported goods and no separate supply arises under the contract, a tax-free characterization may be arguable, so contract terms are decisive.