Published 15 October 2026
Among the recommendations of the 57th GST Council on 8 October 2026 is one that matters to anyone who sells, buys or licenses a brand: an amendment to Schedule II of the CGST Act so that transfer of title in intellectual property rights, whether temporary or permanent, is uniformly treated as a supply of services. It is a recommendation, not yet law. This post sets out how trademark assignments and licences are taxed today, the question the amendment is meant to settle, and what to check before signing a deal.
How IP transfers are taxed today
- Licensing. Paragraph 5(c) of Schedule II already treats the "temporary transfer or permitting the use or enjoyment of any intellectual property right" as a supply of services. Royalties and franchise fees for using a trademark are services.
- Outright assignment. A permanent transfer of title is not named in Schedule II, and whether it is a supply of goods or of services has been argued both ways, because intellectual property can be treated as movable property.
- Rate. Since 1 October 2021 the rate on temporary or permanent transfer of IP rights other than IT software has been 18 per cent, and the goods-side entry for permanent transfers was aligned to the same rate, so the rate is the same whichever way a transfer is classified.
What the 57th Council recommended
The release states the recommendation in one line: amend Schedule II "to provide that transfer of title in IPRs, whether temporary or permanent, will be uniformly treated as supply of services", adding that this "will ease GST compliances and will facilitate smoother cross border transactions involving IPR." Once enacted, a trademark assignment would be a service for every purpose under GST, ending the classification argument.
Why classification matters if the rate is the same
- Place of supply. Services follow sections 12 and 13 of the IGST Act, under which an IP service to a registered Indian buyer is generally supplied where the buyer is located, and to a foreign buyer where the buyer is located. Goods rules turn on movement and location, which fit an intangible badly.
- Exports. Selling an Indian brand to a foreign buyer can qualify as an export of services, and so be zero-rated, if the conditions of section 2(6) of the IGST Act are met, including payment in convertible foreign exchange or in rupees where the RBI permits. The Council separately recommended removing the condition that disqualifies supplies between establishments of the same company.
- Imports. Buying a brand or a licence from a foreign owner is an import of services, on which the Indian buyer pays GST under reverse charge and may take credit; the Council also recommended extending e-invoicing to imports of services for businesses with turnover of ₹5 crore and above.
- Invoicing and time of supply. Service rules decide when the tax is due, which matters for staged consideration such as earn-outs and minimum royalties.
Before you sign a brand deal
- Decide what is being transferred: the registration, the goodwill, pending applications and any copyright in the logo. An assignment deed should list each by number and class.
- Check whether the transfer is part of a business sold as a going concern. Services by way of transfer of a going concern, as a whole or an independent part, are exempt, so a brand sold with the business may carry no GST while a standalone brand sale carries 18 per cent.
- Agree who bears the GST and state the consideration as exclusive of tax; the buyer can usually take input tax credit if the brand is used in its business.
- For cross-border deals, document the place of supply and the foreign-exchange receipt from the start.
- Record the assignment with the Trade Marks Registry in Form TM-P so that the register shows the new owner, and stamp the deed as the applicable stamp law requires.
- Watch for the Schedule II amendment: until it is notified, keep the classification on the invoice and in the contract consistent with your adviser's position.
Frequently Asked Questions
What is the GST rate on selling a trademark in India?
18 per cent on a standalone transfer, which has been the rate for temporary or permanent transfers of IP rights other than IT software since 1 October 2021. A brand sold as part of a business transferred as a going concern can fall within the going-concern exemption.
Is trademark licensing a supply of goods or services under GST?
Services. Paragraph 5(c) of Schedule II to the CGST Act treats the temporary transfer or permitting the use or enjoyment of any IP right as a supply of services.
What did the 57th GST Council recommend on IP transfers?
That Schedule II be amended so that transfer of title in IP rights, temporary or permanent, is uniformly treated as a supply of services. It takes effect only when the law is amended.
Is selling an Indian brand to a foreign company an export?
It can be an export of services, and so zero-rated, if the IGST Act's conditions are met, including a recipient outside India, place of supply outside India and payment in convertible foreign exchange or permitted rupees.
Must a trademark assignment be recorded with the Registry?
Yes. The new owner applies in Form TM-P to be registered as proprietor; until then the register still shows the old owner, which weakens enforcement.
Sources
Ministry of Finance, Recommendations of the 57th Meeting of the GST Council, PIB release ID 2320934, 8 October 2026, item B3(13); CGST Act, 2017, Schedule II paragraph 5(c); IGST Act, 2017, sections 2(6), 12 and 13; Notification No. 06/2021-Central Tax (Rate), 30 September 2021; Notification No. 12/2017-Central Tax (Rate), entry 2 (transfer of a going concern); Trade Marks Act, 1999, section 45 and Form TM-P.
BookMyTM drafts and records trademark assignments and licences, and coordinates the GST treatment with clients' accountants for brand deals in Kerala and across India.