Running Royalty

[MITSUI PRIME ADVANCED]

Dear Sir,

Good Noon,

Pl. advice to us if we will going to pay royalty from India to Japan as a 'Running Royalty' in such service tax position.

service tax applicable on royalty or not.

pl. advice.

Thanks & Regards

Arjun Sachdeva

AI Summary

Service Tax Applicable on 'Running Royalty' Payments to Japan; Reverse Charge Mechanism Applies for Indian Recipients. A query was raised regarding the applicability of service tax on 'Running Royalty' payments from India to Japan. The respondent clarified that the temporary transfer or use of intellectual property rights is considered a declared service and is subject to service tax. Since the service provider is in Japan, a non-taxable territory, the recipient in India must pay the service tax under the reverse charge mechanism.