DGGI Issues Notices to Over a Dozen Food & Beverage Companies for Trademark Usage Violations

The Directorate General of Goods and Services Tax Intelligence (DGGI) has issued show-cause notices to over a dozen food and beverage companies for improper GST payment on trademark usage by their franchises and outlets located outside their home states. The notices demand a total of ₹3,000 crore, covering the period from July 2017. The DGGI argues that brand usage by a franchise or branch in a different state qualifies as a taxable service provided by the head office. This interpretation could significantly increase compliance burdens for businesses operating in multiple jurisdictions. The article discusses the potential implications for the food and beverage sector and the complexities of GST compliance.