Effective date of Service tax of Royalty

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Pooja Shah (Querist)

30 August 2010 Can you please tell me Effective date of service tax on royalty???
Its Urgent!!

Thanks & Regards,
Pooja.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

30 August 2010 Royalty comes under the "intellectual property services" and hence Service Tax is applicable with effect from 10.09.2004

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Pooja Shah

Pooja Shah (Querist)

03 September 2010 Dear Sir,

I appreciated your reply. But as far I am concerned Effective date of service tax on royalty is 01.04.10 or 01.06.10. I am bit confused about it. Can you please revert me for same.

Regards,
Pooja.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

04 September 2010 If you are seeking about services referred in section 65(105)(zzzzt), then effective date is July 1, 2010.

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Pooja Shah

Pooja Shah (Querist)

04 September 2010 Dear Sir,

Thanks a tonn...

Actually I was asking for payment made for Intellectual Property Rights to foreign parties. As foreign parties are not liable to pay service tax hence Indian assessee who is receiver of services is liable to pay Service Tax so was searching for effective date.

Regards,
Pooja.

Pooja Shah

Pooja Shah (Querist)

05 September 2010 Sir,

As you said that sevice tax is payable by parties who receives the same. Hence our assessee is required to pay from 01.07.10

now my question is which As this payment is for Expenses on which we do not receive any service tax but pay for usage of services provided by foreign party so can I claim any set off against it?? As it is Service Tax on Expenses...

pls reply...

Thanks,
Pooja.

SANJAY TALATI

SANJAY TALATI (Expert)

06 September 2010 The Service Tax is an Indirect Tax and hence, ultimately the burden is on the user/customer. In the scheme of the Service Tax, there are certain servies like for e.g. the GTA service in which certain categories like factory, company, society etc. etc. are required to obtain the ST regn no. and comply the ST formalities. In such a situation the ST paid as an Enjoyre of service is deemed as Input Service and whatever ST paid , the assesee can take the Service Tax Credit thereof. Intellacutal Property service is also such service. As u cannot charge ST on the Foreign party, u have yourself assess the ST on the Royalty and obtain the ST under the category of Intellectual Property Rights an pay the ST and take credit thereof .

Further, for the payment of Royalty on the Technical services availed/collaboratuion had with the foreign party, R & D Cess @ 5% is also applicable.This R & D Cess is to be reduced and the balance ST is to be deposited. The Cenvat credit of 5 % R % D Cess is not eligible.

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