Service tax on royalty

[MITSUI PRIME ADVANCED]

Dear Sir,

PL. advice to us we have made one payment form India to Japan related to Royalty Pl. advice to us in such cases service tax attract.

and in service tax law which category is covered ?

Royalty 1 percent paid on fourth qty  Sales .

Pl. advice thanks for your co-operation in advance.

Thanks & Regards

Arjun Sachdeva

[YAGAY andSUN]

Dear Arjun,

Please check the Place of Provisions of services Rules in this regard.  You would have to pay the service tax in cash and you may avail the CENVAT credit on input services.

Regards,

Team YAGAY & SUN

(Indirect Tax Consultants)

[Arup Das]

Dear Arjun Sachdeva

Yes.Service tax is applicable on Royalty.

Under Intellectual property service you need to pay service tax on reverse charge and further you can avail the credit.

At the time of making Service tax payment on Royalty you can get a deduction on R & D cess.

Regards

Arupp

AI Summary

Service Tax Applies to Royalty Payments from India to Japan for Intellectual Property Services, Check Place of Provisions of Services Rules. A user inquired about the applicability of service tax on royalty payments made from India to Japan. Two respondents clarified that service tax does apply to such payments under the category of Intellectual Property services. The first response advised checking the Place of Provisions of Services Rules and mentioned paying the service tax in cash while availing CENVAT credit on input services. The second response confirmed the applicability of service tax on a reverse charge basis and noted that a deduction on R&D cess is available when making the payment.