Technical know How and Royalty payment

[Pradeep Kaushik]

Respected Sir,

  

We are 100% subsidary company of a Korean Co.

There is some queries:

 

1. Payment for Know How - Technicians Visited from South Korea to India for technical support ( For this purpose what documentation we require from Korea office and what are our Direct/Indirect Tax liabilities in this regard)

 

2. Payment for Initial Royalty-( For this purpose what documentation we require from South Korea and what are our Direct/ Indirect Tax liabilities in this regard).

 

Please suggest us your best advice in detail.

Best Regards.

 

Pradeep kaushik

 

 

AI Summary

Korean Subsidiary Advised on 10.3% Service Tax and 5% R&D Cess for Royalties Under Reverse Charge Mechanism A subsidiary of a Korean company inquired about tax liabilities and documentation requirements for payments related to technical support and royalties. The response advised that service tax at 10.3% is applicable under the reverse charge mechanism for services received, including royalties, with an additional R&D cess of 5% on royalties. The subsidiary was instructed to register under the Intellectual Property Rights Service and was informed about the process for R&D cess payment, which involves drawing a cheque and filling out a challan, with no additional legal compliances mentioned.