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Royalty on Intellectual property Rights

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P MURUGAN

ACCOUNTANT

210 Points Posted on 08 April 2026

Please give clarification for the following query? If royalty transaction occurred with in the two companies GST registrants, then FCM or RCM applicable at first sight and safe side ? For the royalty paid to un registered customers, then RCM applicable or not?

Replies (2)

Quick Summary

Royalty is treated as a service under GST. If both parties are registered, FCM applies. If paid to an unregistered person, RCM may apply. Always assess nature of royalty and supplier status before deciding tax liability.

Aashok FC Advisory

Finance Compliance Consultant

1126 Points Posted on 08 April 2026

Royalty = Supply of service under GST
FCM applies when both parties are registered
RCM applies when paid to unregistered persons (safe view) or in notified cases like Govt/mining
Always evaluate nature of royalty + supplier status before deciding