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What is the rate of RCM on Royalty to foreign company under GST?

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What is the rate of RCM on Royalty to foreign company under GST?

  • This topic has 1 reply, 2 voices, and was last updated 2 months ago by gstdoctor.
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  • #978
    Milan Tiwari
    Participant

    What is the rate of RCM on Royalty to foreign company under GST?

    #991
    gstdoctor
    Keymaster

    Under GST regime, temporary transfer or permitting the use or enjoyment of intellectual property right constitutes supply of service as per Schedule II read with Section 7 of CGST Act 2017.

    So in case of foreign company, royalty needs to be paid. Rates applicable for royalty are based on HSN:

    HSN Rate of Tax Description of Service
    99733 12% Temporary or permanent transfer or permitting the use or enjoyment of intellectual property (IP) right in respect of goods other than information technology software.
    997331 18% Temporary or permanent transfer or permitting the use or enjoyment of intellectual property (IP) right in respect of information technology software.
    998599 18% Other support services– management services for rights to industrial property (i.e. trademarks, franchises, etc.).

    For more information, read RCM on royalty paid to foreign company.

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