Service Tax on Royalty

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Umesh Dharmaraya (Querist)
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29 October 2010 A subsidiary company (located in India) paying Royalty on its total sales made during the financial year to its Holding company (located outside India) as a consideration for right to use Technical know-how, designs, process of manufacturing, Trade-marks, etc.
Whether that subsidiary company will have to pay Service tax or / & Research & development cess to Cent. Govt. of India or not?

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)
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29 October 2010 No service tax is not applicable.

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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30 October 2010 Service tax has to be paid on the Royalty amount paid to the foreign company by the Indian Company. and in above mentioned case no service tax will be levied.

other experts please clarify......

BALU V

BALU V (Expert)
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02 November 2010 Does this not amounting to import of technology from a foreign country Mr.Shailesh?

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