A permit must be issued from Veterans' Affairs to sell products using the word "Anzac".
"Permits for Anzac biscuits are generally quickly approved as long as other regulations are met," the DVA spokesperson said.
Gelato Messina was asked by Veterans' Affairs to change the name of its "Anzac Bikkie" gelato to "Anzac Biscuit", a spokeswoman for the national dessert chain told Seven News.
"Can't be serious! World's gone mad," one person posted on Twitter about the fines.
"How about fine people this much for actual crimes, not a damn biscuit recipe," another added.
But others agreed saying it should be kept original.
"Anzac Day is sacred, and protected under law … So leave it alone."
"Too far? #Anzac is trade marked and intellectual property is protected. Fines are necessary."
Seven News reported that the warning comes as part of a wider crackdown by the federal government and RSL on businesses exploiting the Anzac spirit for commercial gain.
One of the earliest recipes for Anzac biscuits includes rolled oats, flour, golden syrup and sugar with later version adding coconut.