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Technical know How and Royalty payment, Service Tax |
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Technical know How and Royalty payment |
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Respected Sir,
We are 100% subsidary company of a Korean Co.
There is some queries:
1. Payment for Know How - Technicians Visited from South Korea to India for technical support ( For this purpose what documentation we require from Korea office and what are our Direct/Indirect Tax liabilities in this regard)
2. Payment for Initial Royalty-( For this purpose what documentation we require from South Korea and what are our Direct/ Indirect Tax liabilities in this regard).
Please suggest us your best advice in detail.
Best Regards.
Pradeep kaushik
Posts / Replies Showing Replies 1 to 6 of 6 Records Page: 1
Dear Pradeep, In sr No.clarify that, whether any payment or reimbersement is made to Korean co. for this service. , if yes then you need to pay service on said amount @ 10.3% under reverse charge mechanism.
2. First of all you need to get registered your self under IPR Service as a service receipent. Where in case of Royalty you need to pay service tax @ 10.3% after the provision in made in the Books of Accounts or Royalty payment is made. You also need to pay R & D cess @5% on Royalty Amount and you will get the abatement of this R & D cess amount while paying service tax. Documents required are copy of Agreement.
Respected Mr. Sonawane, Thanks for the Advice. We are paying the Royalty on our Sales Turnover. So how the Service Tax and R&D Cess is applicable. Please Clarify. Further, please let me know the procedure of R & D Cess payment (It registration, Payments, return and any other legal compliances) I shall be very greatful to you. Best Regards. Pradeep Kaushik
Dear Pradeep, Service tax is applicable on Royalty payment under Reverse charge mechanism under Intellectual property Right Services.
Respected Mr. Sonawane, Thanks for your early reply. Please let me know the procedure for R&D Cess also. (It's registration, Payments, return and any other legal compliances) Best Regards. Pradeep Kaushik
For R&D cess payment you can draw a cheque on A/c R&D Cess & need to fill a challan. As per my knowledge there is not any other legal compliances, but make sure.
As per my knowledge you can make the payment in UNION bank. Page: 1 Old Query - New Comments are closed. |
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