Royalty payment compliance under foreign technical collaboration: certification confirming approval, calculation, tax and reporting compliance required.

Certificate requires documentary proof of RBI/Government approval and registration, itemised prior payments and a calculative annexure showing production, net ex-factory sales, imported component costs, net sales subject to royalty, gross royalty, tax deducted at source and net remittable amount. A chartered accountant must certify examination of books, incorporation of the approval into the collaboration agreement, royalty computation on post-agreement production within approved capacity, fulfilment of export and guarantee requirements, tax payment or tax clearance, R&D cess payment, and submission of the Form TCD return to the Reserve Bank.

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