Service Tax – Exemption of R&D Cess to Consulting Engineer
NOTIFICATION No. , Dated December 16, 2002, reads as:
In exercise of the powers conferred by Sub-section (1) of Section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the taxable services provided by a consulting engineer to any person on transfer of technology from so much of the service tax leviable thereon under Section 66 of the said Act, as is equivalent to the amount of cess paid on the said transfer of technology under the provisions of Section 3 of the Research and Development Cess Act, 1986 (32 of 1986).
Now this is amended by Notification No. 46/2011 dated 19 September 2011 to read as:
In exercise of the powers conferred by Sub-section (1) of Section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the taxable services provided by a consulting engineer to any person on transfer of technology from so much of the service tax leviable thereon under Section 66 of the said Act, as is equivalent to the “amount of cess payable on the said transfer of technology under the provisions of section 3 of the Research and Development Cess Act, 1986 (32 of 1986), subject to the following conditions, namely:-
(A) the said amount of Research and Development Cess is paid within six months from the date of invoice or in case of associated enterprises the date of credit in the books of account:
Provided that the exemption shall be available only if the Research and Development Cess is paid at the time or before the payment for the service;
(B) records of Research and Development Cess are maintained for establishing the linkage between the invoice or the credit entry, as the case may be, and the Research and Development Cess payment challan.
So, now to claim the exemption, the assessee has to:
++ pay the cess within six months from the date of invoice;
++ the cess is paid with or before the payment for the service;
++ records to show linkage has to be maintained.
Notification No. , Dated: September 19, 2011