AAAR: Goods sold at exclusive store by removing the brand names from the packages, doesn’t entail ‘unbranded’ supply

Fact: M/s Aditya Birla Retail Limited is engaged in the processing and trading of wide range of Cereals, Pluses, and Flour classifiable under Chapter 10 of First Schedule of Customs Tariff Act, 1975, further the goods are sold in supermarket and hypermarket format store, namely “More Store” located in various states. The appellant sells the subjected goods under the following brand name, ‘More for you’, ‘More selecta’ and ‘More value’ which are registered trademark under the Trade Mark Act, 1999. Further the packaging of the subjected goods also bears a brand name ‘AdityaBirla’ logo which is the registered trademark of Aditya Birla Management Corporation Pvt Ltd under the Trade Mark Act. The subjected goods are either processed and packed ‘in house’ by the appellant (Stream 1) or are procured in processed and packed from third party vendors (Stream 2).

Issue Involved:

  1. 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, as per the statutory requirement under Subject Statutory Provisions, can be considered as ‘not bearing a brand name’, and, accordingly eligible for exemption from GST in terms of relevant entries to Notification No.2/2017 Central tax (Rate) dated 28th June 2017?
  2. 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 as, per the statutory requirement under the Subject Statutory Provisions as also the declaration ‘Marketed by Aditya Birla Retail Limited’ can be considered as ‘not bearing a brand name‘, and, accordingly eligible for exemption in terms of relevant entries to the Exemption Notifications?
  3. Whether the declarations made on the package, by inter alia using common/generic terms viz. ‘Value’, Daily ‘Superior’ and ‘Choice’, for the sole purpose of indicating the quality of the product so as to enable the customers to identify and buy products based on their requirements, budget and preferences can be construed to be a ‘brand name for the purpose of the Exemption Notifications?

Held: The Hon’ble AAAR, Maharashtra ruled that merely be removing their registered brand name logo viz ‘More’ and ‘Aditya Birla Retail’ from the packaging of some of their products and keeping the surrounding environment intact to take advantage of the said brands would not render such goods unbranded and the benefit of the exemption notification from GST would not be available to such goods. Also the use of word like ‘CHOICE’, ‘VALUE’ or ‘SUPERIOR’ on the proposed packing, which are already in use with the brand ‘MORE’ on the present packing, would amount to branding of goods as the goods can be identified with the brand ‘More’ by the use of word.

Citation: http://gstcouncil.gov.in/sites/default/files/Aditya-Birla-Appellate-Authority-Order.pdf