Chapter 21 - GST on Namkeen & Snacks: HSN Code and Tax Rates Explained

• Unbranded namkeen is taxed at 5% GST, while pre-packaged and labelled branded namkeen attracts a 12% GST rate per the latest GST regulations.
• Namkeen falls under HSN Code 210690, with different GST rates based on branding. Branded products are taxed higher, whereas unbranded namkeen enjoys a lower GST rate.
• A manufacturer can avail the 5% GST rate by forgoing their brand name through an affidavit and ensuring no trademarks, logos, or symbols appear on the packaging.

You are a small business owner running a snack shop, or perhaps you manufacture namkeen and other savouries. You have built a loyal customer base that loves your crispy, spicy, and tangy treats. But when it comes to taxes, things can get confusing. Many small business owners, snack manufacturers, and distributors struggle with the complexity of GST on namkeen and savouries. This guide will break down everything you need to know, from GST rates and HSN codes.

Namkeen attracts GST of 5% and 12%. Here are the details on the namkeen HSN code and rates:

Under the Central Goods and Services Tax (CGST) law in India, a "brand name" or "trade name" is defined as a name or mark that is registered under the Trade Marks Act, 1999. This registration ensures that the brand name is legally recognized and protected, allowing the owner to use it exclusively for their products or services. The CGST law specifically addresses the implications of using a registered brand name on the taxation of goods.According to Notification No. 1/2017-Central Tax (Rate), dated June 28, 2017, the CGST rate on the supply of certain goods is influenced by whether the goods bear a registered brand name.As per the rule, the brand names must have been registered under the following laws:

• The Copyright Act, 1957
• The Trade Marks Act, 1999, regardless of whether the brand name is later deregistered.
• Any applicable law in force in any other country.

The Food Safety and Standards Authority of India (FSSAI) guidelines, specifically Section 18 and Rule 6 of the Food Safety and Standards (Packaging and Labelling) Regulations, 2011, mandate that food packages must include the name and registered address of the manufacturer. However, these statutory requirements are not considered part of a brand name for GST purposes.For a manufacturer to avail the concessionalnamkeen GST rate of 5% on non-branded ones, they must voluntarily forgo their actionable claim or enforceable right on the brand name. This involves filing an affidavit with the jurisdictional commissioner of central tax and ensuring that their product packaging does not display any trademark, registered brand names, symbols, logos, or any other information indicating the product belongs to them.For example, suppose a namkeen manufacturer named "Tasty Snacks" wants to avail the concessional GST rate of 5%. In that case, they must ensure their product packaging does not display the "Tasty Snacks" brand name or logo. Instead, they should print a disclaimer stating they have voluntarily forgone their actionable claim or enforceable right on the brand name. Additionally, they must comply with FSSAI guidelines of mentioning the name and registered address of the manufacturer.

GST on namkeen or savouries bearing someone else’s brand name is subject to specific regulations. According to subsection (1) of Section 5A of the Central Excise Act, Small Scale Industry (SSI) exemption does not apply to goods bearing a brand or someone else's trade name, regardless of whether the brand is registered. That means that manufacturers using another company's brand name must pay the applicable GST rate.For example, if a small-scale manufacturer produces namkeen and sells it under a well-known brand name like "Haldiram's," they cannot claim the SSI exemption. Instead, they must pay the GST rate applicable to branded namkeen, which is 12%.The SSI exemption is a relief provided to small-scale industries under the Central Excise law, allowing them to benefit from reduced tax rates. However, this exemption does not apply to goods bearing someone else's brand name to prevent misuse and ensure fair competition.

Understanding the GST implications on namkeen and savouries is crucial for manufacturers, distributors, and retailers. The tax rate depends on branding, with unbranded products taxed at 5% and branded, pre-packaged items attracting 12% GST. Businesses can opt for the lower tax rate by foregoing their brand name, provided they meet the legal requirements. Staying compliant with GST laws and using a GST calculator ensures smooth operations and better pricing strategies.