R & D Cess on Feasibility Study

[Bhairob Chandra Bor]

Dear Expert,

We are going to pay fees for feasibility study ( some of our tooling) in foreign currency (Euro) to our consultant at Germany. kindly advice whether the R and D Cess will applicable at the time of payment? if applicable then should we take the input tax with service tax? we are regularly depositing R and D Cess on payment of Royalty ( to our technology provider at Korea).

Kind Regards,

bcb

[DR.MARIAPPAN GOVINDARAJAN]

Dear Sir,

The RandD Cess is payable to the consultant on the feasibility study if it amount to 'technology' as defined under Section 2(h) of the Research and Development Cess Act, 1986. Credit cannot be availed on RandD Cess.

Regards.

M. Govindarajan

AI Summary

R&D cess applicability on consultancy payments depends on whether the service qualifies as technology, and cess is non creditable. Levy under the Research and Development cess applies to payments for a feasibility study if the study constitutes technology under the Act, and the cess paid on such payments is not eligible for input tax credit.