No relief for brand M&As, purchases to continue attracting 18% GST

India will continue to impose 18% GST on standalone brand purchases, with no relief for companies involved in brand M&As. Business acquisitions, however, remain exempt under existing GST rules

India will continue to levy an 18 per cent goods and services tax on brand sales, leaving no relief for companies buying brands as part of mergers and acquisitions.

 

Purchases of standalone brands currently attract an 18 per cent GST rate, according to tax experts. The levy was applied in recent brand deals, such as the sale of Imperial Blue by Pernod Ricard to Tilaknagar. This will remain unchanged even after the new GST rules take effect on 22 September.

 

By contrast, full business acquisitions through mergers and acquisitions remain exempt from GST under an existing notification. The latest changes only deal with rate revisions for specific items and do not alter the treatment of business transfers.

 

 

“As long as the M&A transaction involves a transfer of business under the general provisions, there was no GST earlier, and there will continue to be no GST,” Amrish Shah, a partner with Deloitte, said.

 

Interestingly, India’s deal landscape showed resilience in the first seven months of 2025, recording a year-on-year increase of about 10 per cent in overall deal activity, even as global volumes declined, according to GlobalData. The growth was driven by sustained momentum across mergers and acquisitions, private equity, and venture financing transactions. Bankers, however, are expecting deal volumes to improve in the coming quarters due to better valuations and clarity on tax rates for various consumer-facing sectors.