Cess deductibility - service tax

[pravinchandra salian]

The invoice raised by the foreign companay is in the name of the head office and the taxable service rendered at the manufacturing unit. The payment to the service provider is made by the Head office. The service tax paid by the manufacturing unit. Is is proper. The service is under the catoegory of consulting engneers's where the foreign technical person is deputed for repair of machinery. There is no approval from the govt to depute the technician.Are we liable to pay R&D cess. If yes, can we deduct the amount of cess from the service tax payable (as transfer of technology).

AI Summary

Inquiry on Service Tax Legality and R&D Cess Deduction for Foreign Consulting Services to Manufacturing Unit A query was raised about the proper handling of service tax and R&D cess for a foreign company's consulting engineer services provided at a manufacturing unit, with the invoice addressed to the head office. The main concern was whether the service tax paid by the manufacturing unit is lawful and if R&D cess can be deducted from the service tax payable. A response indicated that specific government approval is unnecessary, and R&D cess can be deducted from service tax under certain conditions. Further clarification was sought regarding the legality of the service tax payment and the possibility of claiming a refund for R&D cess paid by mistake.