Mahindra Group gets GST notice over brand name use by group firms

Mahindra & Mahindra (M&M) has received a goods and services tax (GST) notice over the use of the 'Mahindra' brand name by various group companies, ET reported. The show-cause notice asks M&M why it should not pay GST on the services it provides to its subsidiaries by allowing them to use the flagship brand and logo. The notice is for 2017-2023 period.

The notice raises questions about if the GST authorities are widening the interpretation of the law, applying the tax to “related party transactions” even when no consideration is exchanged. This scrutiny follows similar notices issued to several builders in Mumbai earlier this year for brand and trade name use in transactions with subsidiaries and joint ventures.

It is to be noted that corporates are concerned about the repercussions for many business houses as tax officials feel that GST should apply to the royalties or fees.

It is not the first time M&M has a row with the GST officials.

Last year, the company was imposed a penalty of over Rs 14.3 lakh for incorrect input tax credit availed during the transition from the excise regime to the GST regime by erstwhile Mahindra Vehicle Manufacturers Ltd, which has been merged into it.