Service Tax on Foreign Collaboration Royalties
Sir,
We are in the filed of computer education to school children (below 11th class) and have a technology collaboration agreement with a Canadian Company.
Under the agreement, 5% of our revenue coming from sale of Franchise license is paid to collaborator as Royalty after deducting TDS, CESS as per RBI and the Edu. cess. For incomes we get from implementation of Computer learning, we do not pay the 5% Royalty.
At present we are paying service tax (till the 8.00 lakh limit came into force)
The question is should we charge the Royalty payment to Service Tax after the TDS, CESS and Educess?
The collaborator does not have any office in India.
Regards.
2 Answers from Attorneys
Re: Service Tax on Foreign Collaboration Royalties
Yes.You are doing business in India as a partner of that company and you are a registered body in India.You are getting revenue from your frenchise by your efforts and business mechanism.
Re: Service Tax on Foreign Collaboration Royalties
Yes.
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