Tax dept wants GST on logos, brand name

The indirect tax department wants some Indian conglomerates and foreign banks 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 the sources. These entities came under scanner for allowing subsidiaries or Indian entities to use brand names and logos they own for free.

The conglomerates are said to include the Tata and Mahindra groups along with banks such as ICICI, HSBC and Citi. The tax department has sent written inquiry orders to some companies and issued preliminary notices to some foreign banks, said the source. The 18% GST levy would likely result in thousands of crores in taxation for companies and banks, said experts. However, if the subsidiary is a manufacturing unit, the cost could be offset in some way, they said.