R&D Cess on consulting engineering services.

[VINOD KUMAR]

Is R&D Cess also applicable on import of consulting engineering services Please reply. Thanks and regards

[YAGAY and SUN]

Dear Aakash,

Under Section (3) of the said Act, a CESS @ 5% is levied on all payments made towards the import of technology For the purpose of levy of CESS,"payment" shall include:

• Payment made towards import of technology as approved by the Central Government in terms of any foreign collaboration agreement, or approved in accordance with the Industrial Policy of the Government of India, in force, from time to time;
• Payment made towards the cost of drawings and designs in terms of any foreign collaboration agreement as approved by the Central Government or approved in accordance with the Industrial Policy of the Government of India, in force, from time to time;
• Payment made to foreign collaborators or to any other person for or in connection with deputation of technical personal to India in terms of any foreign collaboration agreement, in accordance with the approval granted bythe Central Government or approved in accordance with the Industrial Policy of the Government of India, in force, from time to time;
• Any other payment made towards the import of technology approved by the Central Government.

Thanks,

YAGAY and SUN

(Management and Indirect Tax Consultants)

[Madhukar N Hiregange]

Not for consulting engineering services. maybe for IPR service it could be applicable.

AI Summary

R&D Cess on import of technology may cover foreign collaboration payments; consulting engineering services likely excluded.
R&D Cess applies to payments for import of technology approved by the Central Government, including costs for drawings and designs, payments for deputation of technical personnel, and other approved payments classified as import of technology. Consulting engineering services are generally not treated as import of technology and thus are unlikely to attract the Cess, though IPR or technology-transfer style services could be liable if they fall within the approval-based definition.