GST on Intellectual Property Related ServicesVineet Tiwari

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The Tax Publishers GST--IPR Services GST on Intellectual Property Related Services Vineet Tiwari The learned author aims at making overview of levy of GST on the intellectual property related services. 1. Levy of tax on intellectual property right related services Under the GST regime tax is leviable on the supply of goods or services or both. The term supply is defined under section 7 of the Central Goods and Services Tax Act, 2017 (in short "the CGST Act"), according to which the expression "supply" includes all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business. As per sub-section (1A) of section 7 of the CGST Act, where certain activities or transactions constitute a supply in accordance with the provisions of sub-section (1), they shall be treated either as supply of goods or supply of services as referred to in Schedule II. Schedule II lists the activities or transactions that shall be treated as supply of goods or supply of services. As per clause (c) of para 5 of the Schedule II appended to the CGST Act, temporary transfer or permitting the use or enjoyment of any intellectual property right (IPR), would be regarded as supply of service, hence such service would be chargeable to tax. It is worthwhile to note that permanent transfer of IP would amount to supply of goods, therefore, the same would also be chargeable to tax. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

GST--IPR Services

GST on Intellectual Property Related Services

Vineet Tiwari

The learned author aims at making overview of levy of GST on the intellectual property related services.

1. Levy of tax on intellectual property right related services

Under the GST regime tax is leviable on the supply of goods or services or both. The term supply is defined under section 7 of the Central Goods and Services Tax Act, 2017 (in short "the CGST Act"), according to which the expression "supply" includes all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business.

As per sub-section (1A) of section 7 of the CGST Act, where certain activities or transactions constitute a supply in accordance with the provisions of sub-section (1), they shall be treated either as supply of goods or supply of services as referred to in Schedule II.

Schedule II lists the activities or transactions that shall be treated as supply of goods or supply of services.

As per clause (c) of para 5 of the Schedule II appended to the CGST Act, temporary transfer or permitting the use or enjoyment of any intellectual property right (IPR), would be regarded as supply of service, hence such service would be chargeable to tax.

It is worthwhile to note that permanent transfer of IP would amount to supply of goods, therefore, the same would also be chargeable to tax.