While rendering Structuring advice involving know how transfers( “Research”) the following R & D Act may be consider from point of view of Tax implication.
Payment of R&D CESS
EXTRACTS FROM RELEVANT SECTIONS/CLAUSES OF R&D CESS ACT, 1986 (AS AMENDED IN 1995) AND R&D CESS RULES 1996 AND OTHER USEFUL INFORMATION.
The TDB is the first organisation of its kind within the government framework with the sole objective of commercialising the fruit of indegenous research. The Board plays a pro active role by encouraging enterprises to take up technology oriented products.
1. Rate of CESS - 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
- Any other payment made towards the import of technology approved by the Central Government.
2. Challan and Head of Account for Remittance
The fee payable can be deposited through Challan Form TR-6 (form enclosed), with Reserve Bank of India or State Bank of India, Union Bank of India (authorised Branches) under Central Government Account (Receipt & Payment) Rules, 1983 .
CAclubindia
