How to availing Notification no 14/2012 ST - RESEARCH & DEVELOPMENT CESS.

[Yatin Bhopi]

Dear experts

We are paying technical assistance fees to our parent company. Since it is our associate company we make monthly provisions in the books and we are liable to pay service tax on this provisions under head Intellectual property service other than copy rights on this technical assistance fees. We are paying Research and Development Cess under provisions of section 3 of the Research and development Cess Act, 1986 (32 of 1986) to Reserve Bank of India on quarterly basis.

We wish to avail benefit of Notification no 14/2012 ST dated 17.03.2012 to adjust Research and Development Cess paid against service tax liability under intellectual property service after fulfilling all conditions.

My query is:

How will we adjust the R & Cess in below cases. R & D cess is paid in April 15 ₹ 15000

Month Technical assistance fees Service tax

Jan-15 ₹ 100000 14000

Feb-15 ₹ 100000 14000

Mar-15 ₹ 100000 14000

April-15 ₹ 100000 0 (liability is 14000 and cess paid is ₹ 15000

Or

We have to just pay the service tax after deducting R & Cess Payable each month considering R & D cess will be paid in April 15

Month Technical assistance fees Service tax

Jan-15 ₹ 100000 9000 (14000-5000)

Feb-15 ₹ 100000 9000 (14000-5000)

Mar-15 ₹ 100000 9000 (14000-5000)

Can anyone guide? I hope have clarified my query correctly

AI Summary

Monthly Adjustment of R&D Cess Against Service Tax Advised Under Notification 14/2012 ST for Technical Assistance Fees An individual seeks guidance on adjusting Research and Development Cess against service tax liability for technical assistance fees paid to a parent company. They inquire whether to adjust the cess monthly or annually. A respondent advises that monthly adjustments are appropriate, referencing Notification No. 14/2012 ST, which allows exemption from service tax equivalent to the cess paid, provided certain conditions are met. These include timely payment of the cess within six months of invoicing and maintaining records to establish a link between invoices and cess payments. Compliance with these conditions is necessary to claim the deduction.