Service tax on royalty

This query is : Resolved

CA Santosh Srivastava (Querist)
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20 February 2015 Is service tax on royalty payable for payments made by wholly owned subsidiary to its parent company.

Please provide reference/Case laws also

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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20 February 2015 Royalty payments cannot attract a service tax liability, according to a recent decision of the Service Tax (Appellate) Tribunal, Mumbai Bench. Generally, royalty is paid for the use of technology or know-how. Hence, service tax cannot be attracted.

CA Santosh Srivastava

CA Santosh Srivastava (Querist)
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20 February 2015 Can you please provide reference or case law

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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20 February 2015 I revise my view, royalty payments be considered as a consideration for providing a service under the negative list regime and hence liable to service tax.

See the link for advance ruling.
https://www.cbec.gov.in/aar/rulings/st-rulings/st-ruling-ms-india.pdf

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