SP Services
GST GST Advisory

Government Expected to Impose GST on Brand Names and Logos


The indirect tax department wants Indian conglomerates and foreign banks to put a valuation on their brand names and logos and charge fees from the subsidiary or group company using them and pay 18% GST on that.

Some renowned Indian conglomerates and Foreign Banks are under the scrutiny of Legal Authorities for allowing Indian subsidiaries or entities operating in India to use their brand names and logos for free. The Tax Department of India has ordered these companies to put a valuation on their brand names and brand logos, which are being used by their subsidiaries for free. Companies are expected to charge their subsidiaries and pay 18% GST on their Brand names and logos.

The conglomerates and foreign banks which are under the radar include Tata and Mahindra group along with banks such as ICICI, HSBC, and CITI.

As per financial experts, Foreign Companies and Banks are likely to pay thousands of crores in the form of tax when these Companies and Banks impose charges for the use of brand names and logos. However, the charge might be less if the subsidiary is a manufacturing unit of the Company.

GST Registration Online

Implications of GST on Brand names and Logos

Companies that have allowed their subsidiaries to use their brand names and brand logos will have to determine the open- market value of their logos and names and, therefore, pay GST on that. This charge of GST would be an entirely revenue-neutral exercise as credit may be available to the recipient. However, if not paid, this could lead to unnecessary litigation. This decision may not affect larger Companies, but smaller Firms with a large number of subsidiaries may face problems.

The common notion of tax experts about this decision is that legally, it is correct, but logically it is not a correct decision. It’s not for the first time that this issue came into limelight. Earlier this year, on January 30, the tax department issued legal notices to the banks who allowed their subsidiaries to use their name and logo for free. Some of the reputed  Banks such as Bank of Baroda, State Bank of  India and Kotak Mahindra are under the radar of Tax Authorities.


After the implementation of GST, no service seems to be completely free of cost. Prior to the enactment of GST, Tax Authorities didn’t pay much attention to collecting taxes through Brand names and logos. Now, after the implementation of GST, Authorities want Companies to charge for the use of their Brand name and logo. The Tax Department has sent written inquiry orders to some of the companies and Banks. After this tax gets imposed, Companies and Foreign Banks will have to pay thousands and crores as tax.

Shubham Chauhan

A passionate legal content writer, a nature enthusiast, an avid reader, and a part-time thinker. By means of conducting in-depth research on industry related topics, Shubham often builds flawless and intelligible legal content for populace from all walks of life.

Business Plan Consultant

Trending Posted

Startup CFO

Our Awards Our Awards

Top 100 Companies in Asia - Red Herring
Top 100 Companies in Asia - Red Herring

Red Herring Top 100 Asia enlists outstanding entrepreneurs and promising companies. It selects the award winners from approximately 2000 privately financed companies each year in the Asia. Since 1996, Red Herring has kept tabs on these up-and-comers. Red Herring editors were among the first to recognize that companies such as Google, Facebook, Kakao, Alibaba, Twitter, Rakuten, Salesforce.com, Xiaomi and YouTube would change the way we live and work.

Top 25 in India - Consultants Review

Researchers have found out that organization using new technologies in their accounting and tax have better productivity as compared to those using the traditional methods. Complying with the recent technological trends in the accounting industry, Enterslice was formed to focus on the emerging start up companies and bring innovation in their traditional Chartered Accountants & Legal profession services, disrupt traditional Chartered Accountants practice mechanism & Lawyers.

Top 25 in India - Consultants Review

In the news