Brand Promotion Expenses Not Part of Cost and Can’t Be Subjected to Duty: SC

Money spent by importers of sport goods on brand promotions and appointment of brand ambassadors cannot be subjected to import duty, the Supreme Court has said. The ruling came in the backdrop of revenue officials issuing notices to several dealers who had imported golf kits, badminton and table tennis rackets and had roped in brand ambassadors, including PV Sindhu and Saina Nehwal.

The tax department had approached the top court after a tax appellate tribunal rejected the revenue department’s contention.

“We find no merit in this appeal,” the SC said in an order pronounced on July 1.

The tax department had claimed that several multinational companies were undervaluing imports and that marketing spend is nothing but a mandatory requirement embedded in the cost to hoodwink Indian authorities. S-ET

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