Intellectual property or IP can be defined as the formations of mind, like inventions, pieces of literature or artistic creations, patents, trademarks, designs, symbols, names and images used for commercial purposes. In India, services relating to intellectual property delivered by any individual or entity come under the liability of paying the service tax. Through this article, we bring to you information about the applicability of service tax on trademark, designs and patents.
Now that we know what Intellectual property is, we must know what Intellectual property rights are before we move any further. These rights are the rights to any kind of intangible property like the ones mentioned above and various others. Further, we also need to know that the transfer or authorizing the use of any intellectual property right is called intellectual property service. Intellectual property services are the services that are provided by one person to another. These people probably are the holder(s) of intellectual property rights, with relation to the intellectual property right. It must however be noted that the services provided for registration of intellectual property like trademark registration service, copyright registration service and patent registration service are not to be confused with the intellectual property services. These services are essentially legal services, quite different from the one mentioned above.
Apart from the details already given, it is also important to know when and where the service tax is applicable on the intellectual property. Service tax is levied on the intellectual property only in case when the owner(s) of the intellectual property rights passes on the authority to temporarily use the intellectual property to some other person in exchange for some consideration. It must be noted here that when permanent transfer of intellectual property rights takes place, it is not regarded as rendering of any service. This thus excludes the sale of intellectual property services from the list of taxable services. This is so because in cases like these the owner no longer remains an owner of the intellectual property right.
Under the previously existing norms, transfer of copyright, for a specific amount of time agreed upon, was not placed under the taxable services. After the validation of the court of law, service tax started to be levied on income that came from granting temporary authorisation of rights of cinematographic films. Such temporary transfer or consenting to use the copyright for a specific amount of time, under an agreement is now taxable under the service tax.
This article is about service tax registartion and service tax registartion banglore for more information please visit our website: https://www.efilingportal.in