Service tax on royalty of exports
This query is : Resolved
Kasinath Tumuluru
(Querist)
17 February 2009
We are into semiconductor chip designing business. we provide the software to our subsidiary, which is at USA, to manufacture the chips and sale. we are claiming some percentage of royalty on sales done by our subsidiary, because we are providing the software.
Is the royalty which i am getting is exempted from service tax as per Service tax export rules,2005 ( i am fullfilling 3 conditions) or will it attract the service tax? please advice.
Is the royalty which i am getting is exempted from service tax as per Service tax export rules,2005 ( i am fullfilling 3 conditions) or will it attract the service tax? please advice.
CA. B.SRINIVASULU
(Expert)
17 February 2009
If you prove that the software is being used outside india and you are receiving sale proceeds in foreign exchange to india and firc states that this is for the sale price of software, you are exempted from paying service tax on your exports.
If you prove that the software is being used outside india and you are receiving sale proceeds in foreign exchange to india and firc states that this is for the sale price of software, you are exempted from paying service tax on your exports.
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