India govt says 5% GST only on rice brands registered with Trade Marks Act.

Clearing the air on classification of tax on rice brands, the government said the 5% goods and services tax rate is applicable to only those companies registered under the Trade Marks Act, 1999. Otherwise, there is zero tax on staples such as rice and wheat. If a company carries a brand or trade name but it is not registered under the Act, it will not be liable to pay the tax, Minister of State for Finance Santosh Kumar Gangwar said in a written reply to a Lok Sabha question. The decision is fortuitous for the country’s largest selling premium rice brand, India Gate basmati, because it is not registered under the Act. The inadvertent tax exemption to India Gate has rattled other branded rice players, as India Gate basmati, which earlier commanded a premium in the retail market, is now be at par with other brands of basmati rice.