Trademarks, goodwill will face GST of 18%

NEW DELHI: Intangibles such as trademarks and goodwill will face a goods and services tax ( GST) of 18% according to the final rate schedule notified by the government on Wednesday.

The proposed tax is to be rolled out from July 1. Anything not mentioned in the harmonised system nomenclature will face 18% tax says the schedule notified by the government.

These are called residual entries in technical parlance and the same principle is already in place for GST on services.

Since intangibles such as trademarks and goodwill do not find a mention in the schedule they would fall in the category of residual entry, according to tax experts. The detailed chapter-wise rate schedule has been notified in line with the impending rollout of the new tax from July 1.

The GST Council, the apex body comprising the Centre and the states set up to decide on GST issues, has finalised a four-tier tax structure of 5% (2.5+2.5), 12% (6+6), 18% ( 9+9) and 28% (14+14) for GST (Central GST+ State GST), but the highest slab has been pegged in the law at 40%. The Centre has notified the central GST rates that would come into effect from July 1. All states will separately notify the rules and the rate schedule. There is also cess on luxury and sin goods.

The GST Council had approved the fitment of goods and services in these slabs at its meeting on May 19-20 in Srinagar.