Cess deductibility - service tax, Service Tax

[pravinchandra salian]

The invoice raised by the foreign companay is in the name of the head office and the taxable service rendered at the manufacturing unit. The payment to the service provider is made by the Head office. The service tax paid by the manufacturing unit. Is is proper. The service is under the catoegory of consulting engneers's where the foreign technical person is deputed for repair of machinery. There is no approval from the govt to depute the technician.Are we liable to pay R&D cess. If yes, can we deduct the amount of cess from the service tax payable (as transfer of technology).

Posts / Replies

[Dinesh Gupta]

Specific approval from the central government is not required for collaboration agreement it is in accordance with Industrial policy of Government of India. Therefore, you need to check the applicability of R&D cess on this particular activity. As per the provisions of service tax, if you pay R&D cess, the same is liable to be deducted from the service tax as exemption under notification no. 18/2008 under consulting engineering services.

[pravinchandra salian]

Thanks Mr. Dinesh Gupta Please clear the subject matter as under: 1) Whether the service tax paid by the manufacturing unit is within the purview of law. 2) There is no colloboration aggreement . It is an one time visit for repair of machine. Can it be termed as Transfer of technology. If R&D Cess paid inadvertently can refund can be claimed.

[Rama Krishana]

You are requested to check the an article within TMI commentaries in this website.