FBR to confiscate goods without brand licensing

FBR to confiscate goods without brand licensing

In a bid to enhance regulatory oversight and combat counterfeiting, the proposal to make brand licensing mandatory for manufacturers of specified goods has been put forward. In the event of non-compliance, the Federal Board of Revenue (FBR) is poised to be empowered with the authority to confiscate such items.

This significant development has been introduced through an amendment to the Sales Tax Act, 1990.

According to sources within the FBR, the initiative to mandate the licensing of brand names is part of a broader strategy to bolster the regulatory framework and curb illicit trade practices. The proposed amendment, outlined in the Finance Bill, 2021, introduces Section 40E to the Sales Tax Act, 1990. This section stipulates that manufacturers of specified goods must obtain a brand license for each brand or stock-keeping unit (SKU), as prescribed by the FBR.

The move towards mandatory brand licensing is rooted in the recognition of the role branding plays in establishing product authenticity and ensuring consumer confidence. By requiring manufacturers to obtain brand licenses, the government aims to create a more transparent and accountable supply chain, ultimately safeguarding consumers from substandard or counterfeit products.

The proposed amendment further outlines the consequences for manufacturers failing to comply with the mandatory brand licensing requirement. Any specified brand or SKU found to be sold without the necessary license from the FBR will be deemed counterfeit goods. Such goods will be subject to outright confiscation and destruction in a manner prescribed by the authorities.

It’s important to note that the proposed measures emphasize the gravity of the issue, with the term “counterfeit goods” indicating a heightened level of concern over the proliferation of fake or unauthorized products in the market. The proposed confiscation and destruction of these goods are designed to serve as a deterrent, discouraging manufacturers from engaging in unlicensed branding and safeguarding consumers from potential harm.

The Finance Bill, 2021, underscores that the prescribed manner of destruction and confiscation will not preclude any additional penal action that may be taken under the Sales Tax Act, 1990. This provision underscores the government’s commitment to ensuring strict enforcement of regulations and holding manufacturers accountable for compliance.

While the proposed amendment marks a significant step towards fortifying the legal framework, it also raises awareness about the importance of intellectual property rights and the role they play in fostering a fair and competitive market. By addressing the issue of unlicensed branding through mandatory licensing, the government aims to create an environment that encourages innovation, protects consumers, and supports legitimate businesses in the marketplace.

As the proposal moves forward, stakeholders in the manufacturing and branding sectors are urged to stay informed about the evolving regulatory landscape and be prepared to adapt to the new licensing requirements outlined by the FBR. The anticipated implementation of mandatory brand licensing represents a proactive measure to enhance consumer protection and promote fair business practices within the country.