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November 2011

Exemption of R&D Cess to Consulting Engineer & Holder of the Intellectual Property right — Notification Nos. 46/2011-ST & 47/2011-ST both, dated 19-9-2011.

By Tarun Ghia, Brijesh Cholera, Pratik Mehta
Chartered Accountants
Reading Time 1 mins
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As per existing Notification No. 18/2002, dated 16-12-2002 service tax on ‘Consulting Engineer Service’ and as per existing Notification No. 17/2004, dated 10-9-2004 service tax on ‘Intellectual Property Service’ are exempted to the extent of R&D Cess payable under Research & Development Cess Act, 1986.

These existing Notifications are now amended by the Notification No. 46/2011 & 47/2011, respectively to reduce service tax to the extent of R & D Cess subject to the fulfilment of the following cumulative conditions :

(a) R&D Cess is paid within 6 months of booking of invoice;
(b) R&D Cess is paid within 6 months of date of credit in books in case of associated companies;
(c) In any case R&D Cess should be paid before payment for the service.

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