SERVICE TAX ON ROYALTY PAYMENT

[SUMEDH AYARE]

Dear Sir

We are paying royalty to foreign company for using their formula for manufacturing the product in india. Whether we are liable to pay service tax.

If yes,  then from which particular date the service tax is applicable. Also provide us the year wise rate of service tax.  

 

Regards

Sumedh Ayare 

 

[YAGAY and SUN]

Yes, such payment will surely attract service tax under IPR Services.

For details please check 'IPR Services' in this regard.

AI Summary

IPR services: royalty payments for use of foreign manufacturing formula attract service tax; check applicable rates.
Payments to a foreign company characterised as royalties for use of its formula in manufacturing in India attract service tax under IPR Services. The text does not specify effective dates or year wise rates and directs interested parties to the governing provisions for IPR Services to determine the date of applicability and applicable rates.