Permanent Transfer of Intellectual Property

[RAMNIRANJAN KANDOI]

From R M KANDOI

In one Business Transfer Agreement, where it is written that follwing is transferred----
Assets means--"All intellectual property"
According to me it is permanent & not temporary,
As per Excise Auditor, as VAT is not paid on transfer of Intellectual Property & hence Service Tax is payable.on transfer of "All Intellectual Property"
Request for your clarification on this point & if any case law then,it will be more helpful,if possible, pl. send

AI Summary

Permanent transfer of intellectual property may avoid service tax; licence or royalty characterisation can trigger service tax liability.
Whether transfer of "all intellectual property" is taxable under the Finance Act, 1994 turns on characterisation: temporary transfer or permitting use of IP is a declared service under Section 66E and attracts service tax, while a genuine permanent transfer of ownership ordinarily does not. Tax outcome also depends on payment character-one-time fees effecting a sale may attract VAT, whereas payments treated as royalty (where VAT is not charged) may be subject to service tax.