One of the largest selling basmati rice brands in India – the India Gate, has been exempted from paying the Goods and Service Tax as the brand has not been registered under Trade Mark Act 1999.
India Gate’s basmati rice with that signature classic fragrance and those elongated grains of rice will now get a tad cheaper as it is totally exempted from paying GST. The brands – India Gate, Lotus and Unity Brand come under KBRL Ltd. and the firm has not registered in Class 30 under Trademark Act 1999 which is why GST it has to pay will be NIL. This is because as per the GST slab, unpacker or loosely sold grains and cereals will require no GST whereas if the same commodity is packed and sold under a brand name, 5% GST will be applicable.
So as per the announcements made by the Finance Ministry, a registered brand name is a brand name or business name which is registered under Trademark Act 1999. It is not that KBRL doesn’t have a trademark because of lack of trying or intentionally excluded. In fact, the company has applied for trademark multiple times before the Controller General of Patents Design and Trade Marks since 1999, which is even mentioned in Intellectual Property India website. But the applications were always rejected, objected or refused to be accepted. Justifying the cliché – Everything happens for good.
The exemption from GST is a major advantage for India Gate and consumers but is obviously criticised by its rivals like Kohinoor, McCormick and Co. and Daawat as they are increasing the prices on their labels because of GST whereas India Gate gets a chance to sell almost similar quality of rice at much lower price. It may be a matter of dismay for India Gate’s rivals but it is surely a treat for basmati rice lovers, which is almost everyone.