Procedure to shown R&D Cess and S.Tax on Royalty

[RAM SHARMA]

Dear Experts,

What is the procedure of service tax on royalty and R&D Cess to show in service tax return. As per service tax rule we have to pay 5% R&D cess and balace 7% in service tax on royalty. Secondly can we take cenvat credit of 7% service tax on royalty. Pl. advice.

Thanks

[JAMES PG]

First of all R&D Cess is not payable under ST Rules.It is payable under section 3 of the Research and Development Cess Act, 1986 (32 of 1986)R&D Cess Act. Amount paid towards R&D Cess can be claimed as exemption from ST payable as per Not 14/2012-ST dated 17.03.12. While filing ST-3 Return, this notification can be qouted. Cenvat is available as per the eligibility norms of CCR

AI Summary

R&D cess treatment clarified: R&D cess separable from service tax and may be exempted from royalty service tax when claimed appropriately.
R&D cess on royalty is imposed under the separate R&D cess statute and is not a service tax levy; amounts paid as R&D cess may be claimed as an exemption against service tax on royalty by citing the administrative notification when filing the ST-3 return. Service tax remains payable on the balance royalty amount, and cenvat credit for service tax charged on royalty is available only in accordance with the eligibility conditions of the Cenvat Credit Rules.