Mahindra & Mahindra received a notice from the GST office stating that the group companies in the name 'Mahindra' were found in the unpaid GST list (Representative Image)

The Indian automobile manufacturing company, Mahindra & Mahindra received a notice from the GST office stating that the group companies in the name ‘Mahindra’ were found in the unpaid GST list for the service between 2017 to 2023.

It was said that the group companies should pay GST charges for the royalty of the brand name as it escalates tensions among major corporate companies. The Goods and Service Tax department noticed that the use of the ‘Mahindra’ brand name by various group companies is left to pay GST for the royalty.

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As per the reports, the GST department raised questions on the service given by the parent to all other group companies giving them access to the flagship brand and logo as the group companies have been using the brand logo for all the corporate businesses.

According to the Tax officials, GST is imposed on the royalty payments that the group companies are supposed to remit to the parent company. However, the corporate circle takes it as a meaningless demand and tax practitioners deny this means of payment.

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If the GST department demands such tax payments, it will be difficult for other companies as multiple corporate businesses have been using a main brand fame, to run their business under royalty payments. GST is usually paid by consumers and is recorded by the tax department as assigned by the government. Suppose, the royalty payment is fixed at 10 crore, the applicable GST of 18 per cent may cost them 1.8 crore as the parent company may receive 11.8 crore as total royalty payments. the 1.8 crores will be levied by the government as the GST payment, as per ET.

Mahindra & Mahindra is a popular Indian automobile manufacturing company headquartered in Mumbai. It was established in 1945 as Mahindra & Mohammed and later renamed to Mahindra & Mahindra. M&M is one of the largest vehicle manufacturers by production in India as a part of the Mahindra Group.