School uniforms and made-up products such as quilts, blankets, towels and linen bearing the name or logo of a school, security agency, company, hotel, airline or a tailor are not considered brands and will not incur excise duty, according to a clarification from the Centre.

Goods with the tailor or manufacturer's name affixed on them will not be considered branded items.

Also, blankets supplied to the defence establishment, armed forces and police forces against tenders which stipulate that the name of the manufacturer should be clearly indicated or marked on the product will also not incur excise duty.

All the above will not be treated as branded products, just because they bear a name or logo printed, etched or embroidered on them, says the clarification from the Tax Research Unit (TRU) in the Ministry of Finance.

“In all these cases, there is no nexus between such a name or logo and the product at the time of its sale, which is an essential ingredient in the definition of the term ‘brand name'.

“Unless such garments/made-ups also bear a brand name in addition to the name or logo of the school, security agency, hotel, airline or company, such goods would not attract excise duty. It is also gathered that in some cases, apart from the name or logo of such organisations, the name of the tailor or manufacturer is affixed on such garments. However, mere affixing of the name of the tailor or manufacturer would not constitute a brand name,” says Mr Yogendra Garg, Director, TRU, in the clarification sent out to the customs and central excise departments.

The statement is in response to representations from the trade and industry seeking clarification on certain issues pertaining to the levy of excise duty on readymade garments/ made-ups that either bear or are sold under a name.

Another issue raised by the trade relates to the determination of eligibility of a manufacturer or factory for the benefit of small-scale exemption.

Under this exemption, a manufacturer or a factory whose aggregate value of clearances for home consumption did not exceed Rs 4 crore in the preceding financial year is eligible for full exemption on similar clearances not exceeding Rs 1.5 crore in this financial year.

It has already been clarified that a certificate from a chartered accountant about the aggregate value of clearances in the preceding financial year may be accepted.

It has now been decided that self-certification by a manufacturer may also be accepted for this purpose.

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