TaxTMI 
TaxTMI 
EFFECTIVE RATE OF SERVICE TAX ON INTELECTUAL PROPERTY SERVICE
03 Aug 2014 
2 Replies 
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Effective service tax rate after R&D cess: reduced by R&D cess exemption where payment and record conditions are satisfied.
Taxable services for import of technology are exempt from service tax to the extent equal to the Research and Development Cess paid on that import, conditional on payment of the cess within six months of invoice (or credit entry for associated enterprises), payment at or before the time of payment for the service, and maintenance of records linking the invoice or credit entry to the R&D cess payment challan. (AI Summary)
Taxable services for import of technology are exempt from service tax to the extent equal to the Research and Development Cess paid on that import, conditional on payment of the cess within six months of invoice (or credit entry for associated enterprises), payment at or before the time of payment for the service, and maintenance of records linking the invoice or credit entry to the R&D cess payment challan. (AI Summary)
PLEASE INTIMATE THE EFFECTIVE RATE OF SERVICE TAX ON INTELLECTUAL PROPERTY SERVICE (IMPORT OF TECHNOLOGY) AFTER DEDUCTING R&D CESS i. e. WHETHER IT WILL BE 12.36%-5% R&D CESS = 7.36% OR 12%-5%=7%+. 21%(CESS)=7.21%.AN EARLY REPLY IS REQUESTED. THANK YOU SIR.