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Taxman  demands  GST  on  brands,,  llogos  –  Kanakkupiillllaii    
Indirect Tax – GST 
 Some Indian conglomerates and foreign banks are among those under the 
scanner for allowing subsidiaries or Indian entities to use brand names and 
logos they own for free. 
 The indirect tax department wants these entities to put a valuation on the 
brand names and logos, charge fees from the subsidiary or group company 
and pay 18% goods and services tax (GST) on that, according to people 
with direct knowledge of the matter.
Issue Raised Before
 Tax experts said that under GST law, a transaction 
between related parties — a company and its subsidiary or 
an Indian arm and its parent overseas — is liable even if 
there is no consideration. 
 This has resulted in the indirect tax department raising 
demands on the brands and logos that are owned by a 
holding company or conglomerate but used by subsidiaries 
and group companies without any payment.
Brand Logos
“Companies that have allowed use of brand, 
product licences, logos etc. would have to 
determine the open-market value of these and pay 
GST on the same,” said Ritesh Kanodia, partner, 
Dhruva Advisors, a tax advisory firm.
GST Charging 
 The tax department wants the banks to pay 18% GST on 
the ‘deemed’ value of the brand transactions and pay tax 
on the fees charged.
 “Charging of GST could be an entirely revenue-neutral 
exercise as credit may be available to the recipient,” said 
Kanodia. But “if not done, (this) could result in 
unnecessary litigation.”
Tax on logos and brands
 For the banks, a large part of the GST would 
become pure cost as they would not be able to 
set it off against future tax liabilities, experts 
said. Tax on logos and brands hadn’t been an 
issue under the erstwhile tax regime but in the 
GST framework nothing is entirely free of cost, 
they said.
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