Earlier the GST Council has refrained companies and businesses going for deregistration of their brands to avoid GST but lately it introduced the terms for deregistration of brands.
In continuance of the same, such companies who aim to be put in the lower GST bracket or avoid GST need to submit an affidavit with the tax official about foregoing such brand title.
The finance ministry statement said, "the businesses will have to print in indelible ink on containers in which they are selling cereals, pulses, flours that they have voluntarily foregone actionable claim or enforceable right on brands".
After the roll out of GST, unpacked food items including grains were exempt from GST while those packed in some container having a brand title to its name attracted a GST of 5%. For the tax to apply, the finance ministry has sought a benchmark date as May 15 and in case the brand was registered on this date then tax has to be charged on it irrespective of whether it had been subsequently deregistered or not.
"A mark or name in respect of which actionable claim is available shall be deemed to be a registered brand name for the purposes of levy of 5 per cent GST," the finance ministry said.
So to avoid 5% GST, you as a business entity that has deregistered its brand need to file an affidavit for the same and also print in indelible ink on the item's container informing consumers at large.