{"id":10849,"date":"2020-06-16T12:41:10","date_gmt":"2020-06-16T07:11:10","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=10849"},"modified":"2020-06-16T12:41:11","modified_gmt":"2020-06-16T07:11:11","slug":"gst-on-intellectual-property-rights-related-services","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/gst-on-intellectual-property-rights-related-services\/","title":{"rendered":"All you must know about GST on Intellectual Property Rights Related Services"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Through this Write-up, we are covering the applicability of\nGST on <strong><em>Intellectual Property Rights (IPR)<\/em><\/strong> related services and other\ninformation related to Intellectual Property. Intellectual Property rights are not\nmuch different from other property rights. Description of this right is\navailable in <strong><em>Article 27- Universal Declaration of Human Rights. <\/em><\/strong><\/p>\n\n\n\n<p>These rights grant the <strong><em>exclusive rights<\/em><\/strong> to the owners or\ncreators of patents, trademarks, or copyrighted elements to gain maximum profit\nfrom their investment or any other work. Furthermore, these rights help protect\ncompanies&#8217; concepts and discoveries to maintain their brand value. Let\u2019s\ninitiate the trip with the introduction part of Intellectual Property before\ncoming to the main part of <strong><em>applicability of GST on Intellectual\nProperty Right (IPR related services). <\/em><\/strong><\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/gst-on-intellectual-property-rights-related-services\/#Intellectual_Property_IPR_in_Brief\" >Intellectual Property &amp; IPR in Brief<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/gst-on-intellectual-property-rights-related-services\/#Applicability_of_GST_on_Intellectual_Property\" >Applicability of GST on Intellectual Property<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/gst-on-intellectual-property-rights-related-services\/#Taxability_of_GST_on_Intellectual_Property_Rights\" >Taxability of GST on Intellectual Property Rights<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/gst-on-intellectual-property-rights-related-services\/#Classification_of_IPR_Related_Services\" >Classification of IPR Related Services<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/gst-on-intellectual-property-rights-related-services\/#Applicability_of_GST_on_Intellectual_Property_Rights-_GST_Rates_for_Software\" >Applicability of GST on Intellectual Property Rights- GST Rates for\nSoftware<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/gst-on-intellectual-property-rights-related-services\/#Take_Away\" >Take Away<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Intellectual_Property_IPR_in_Brief\"><\/span>Intellectual Property &amp; IPR in Brief <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Intellectual property is a property type that involves the\nphysically intangible creation of the intelligent human mind. The creativity of\nthe mind brings artistic as well as literary designs, images, symbols, and\ninventions, etc. <strong><em>Examples for this type of property are- Trademarks, Copyrights,\nPatents, etc. <\/em><\/strong><\/p>\n\n\n\n<p>Creators of intangible properties have got the specific rights to protect their property. The appropriate term for these rights is- &#8220;<a href=\"https:\/\/corpbiz.io\/learning\/different-ip-rights-in-india\/\"><strong>Intellectual Property Rights<\/strong><\/a>.&#8221; Indian legislation has enacted various Acts for the purpose of safeguarding the Intellectual Property of individuals as well as Companies.<strong> <em>The Acts with respect to Intellectual Property rights are- <\/em><\/strong><\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"576\" height=\"349\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/06\/image-100.png\" alt=\"Intellectual Property rights\" class=\"wp-image-10850\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/06\/image-100.png 576w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/06\/image-100-300x182.png 300w\" sizes=\"(max-width: 576px) 100vw, 576px\" \/><\/figure><\/div>\n\n\n\n<p>Rights for the protection of Intellectual Property are\nnecessary for bringing transparency as well as fairness in terms of commercial\npractices. Laws governing and protecting the Intellectual Property ensure that\nmisuse of such property is next to impossible, and also such property won&#8217;t get\nstolen.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Applicability_of_GST_on_Intellectual_Property\"><\/span>Applicability of GST on Intellectual Property<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>Applicability of <a href=\"https:\/\/corpbiz.io\/gst-registration\"><strong>GST<\/strong><\/a> on Intellectual Property Right related services is concerned with both the temporary transfer as well as the permanent transfer of IPR. Authorizing the use of IPR is a part of temporary transfer. <\/li><li>Intellectual Property Rights gets considered as <strong><em>&#8216;Good&#8217;<\/em><\/strong> while license to use the IPR is a part of <strong><em>&#8216;Service<\/em><\/strong>.&#8217;<\/li><li>IPR is a creator&#8217;s property, and if the creator permanently makes the transfer of rights on Intellectual Property, then it would get considered as a supply of goods.<\/li><li>According to <em><strong>Schedule 2, Para C of the CGST Act<\/strong><\/em><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/Goods_and_Services_Tax_(India)\"><strong>[1]<\/strong><\/a><\/sup><strong><em>,<\/em><\/strong> Temporary transfer of allowing the use of Intellectual Property rights would get considered as a supply of service.<\/li><\/ul>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/authority-of-advance-ruling-on-gst-applicability-2020\/\">GST Applicability on Works Contract for NCBS &#038; Food Services for Exempted Institutions: AAR\n<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Taxability_of_GST_on_Intellectual_Property_Rights\"><\/span>Taxability of GST on Intellectual Property Rights <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<table class=\"table table-bordered\"><tbody><tr><td>\n  <strong>Description\n  <\/strong>\n  <\/td><td>\n  <strong>Bracket<\/strong>\n  <\/td><td>\n  <strong>GST\n  Rates<\/strong>\n  <\/td><td>\n  <strong>HSN\n  <\/strong>\n  <\/td><td>\n  <strong>HSN\n  Classification\/Heading<\/strong>\n  <\/td><\/tr><tr><td>\n Temporary\n  Transfer of Intellectual Property Rights(Other than Software)\n  <\/td><td>\n Service\n  <\/td><td>\n  CGST-&nbsp; 6% + SGST- 6%\n  <\/td><td>\n  9973\n  <\/td><td>\n  Renting along\n  with Leasing Services\n  <\/td><\/tr><tr><td>\n  Permanent\n  Transfer of Intellectual Property Rights\n  <\/td><td>\n  Goods \n  <\/td><td>\n CGST- 6% +\n  SGST-6 %\n  <\/td><td>\n  \n  <\/td><td>\n  Any Chapter \n  <\/td><\/tr><\/tbody><\/table>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Classification_of_IPR_Related_Services\"><\/span>Classification of IPR Related Services <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>The classification of IPR related services takes place under the following three heads- <\/em><\/strong><\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"600\" height=\"438\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/06\/image-101.png\" alt=\"Classification of IPR\" class=\"wp-image-10852\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/06\/image-101.png 600w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/06\/image-101-300x219.png 300w\" sizes=\"(max-width: 600px) 100vw, 600px\" \/><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">GST Liability on Software <\/h3>\n\n\n\n<ul><li>Software is a collection of computer\ninstructions and data that empowers physical hardware so that it can perform\ncomputational operations in a particular way, be in the operating system of the\ncomputer or web browser, or web processor.<\/li><li>As per <strong><em>Para 5 subsection d, schedule 2 of the CGST\nAct<\/em><\/strong>, the supply of services under GST encircles the development of\nsoftware, programming, design, adaptation, and up-gradation, and software\nenhancement, along with the implementation of IT software.<\/li><li>Information technology software refers to\nrepresentation instructions, data, image or sound, comprising object code\ntogether with source code recorded in the form of machine-readable, in which a\nuser has got the ability to manipulate and get interactivity related to these\ninstructions either with the help of a computer or an automatic data machine or\nother equipment or device.<\/li><li>In <strong><em>Customs Tariff Act- Heading 8523 80 20<\/em><\/strong>,\nthe software in physical form and IT software would get considered as goods\nunder goods and service tax.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Cases of the Past that Proves Softwares as Goods<\/h3>\n\n\n\n<ul><li>In the case of <strong><em>State Bank of India Vs. Municipal Corporation 1997<\/em><\/strong>, it was regarded that computer software comes under the category of goods as it is a computer <strong><em>&#8220;appliance.&#8221;<\/em><\/strong> Further, the octroi would get imposed on full value and not only on the empty floppy value.<\/li><li>In another case of <strong><em>Tata Consultancy Services vs. Andhra Pradesh State in the year 2004<\/em><\/strong>, it has been held that different types of canned software such as Lotus, Oracle, etc. get considered as goods. The program originator holds the copyright in the program, but after the preparation of copies and getting marketed, they come under the head of Goods.<\/li><li>Also, there was a case in <strong><em>2008- Infosys Technologies Ltd. Vs. Special Commissioner<\/em><\/strong>, it was held that Customized as well as Non-Customized software both would get considered as goods.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Applicability_of_GST_on_Intellectual_Property_Rights-_GST_Rates_for_Software\"><\/span>Applicability of GST on Intellectual Property Rights- GST Rates for\nSoftware<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A similar GST pattern is followed for the GST rate of\nlicensing of software service or development of software service and the GST\nrate for goods.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">GST Rates and HSN in case of Software as Goods<\/h3>\n\n\n\n<p>Permanent transfer of the Intellectual Property Rights of\nsoftware would get recognized as &#8220;Goods.&#8221; Applicability of GST on\nIntellectual Property Rights for software as <strong><em>&#8220;Goods&#8221; is 18% (9%\nSGST+ 9% CGST) or 18% IGST. <\/em><\/strong>Talking about the HSN classification, it is\n<strong><em>&#8216;Any\nChapter,&#8217; Schedule 3 (Sr. No. 452 P) of Notification No. 1\/2017: CT (Rate) as\nwell as 1\/2017 &#8211; IT (Rate) date for both 28-06-2017. It came into effect from\nthe 15th of November, 2017.<\/em><\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">GST Rates and HSN in case of Software as Services<\/h3>\n\n\n\n<p>Temporary transfer of Intellectual Property Rights of\nsoftware would get acknowledged as service. Applicability of GST on\nIntellectual Property Rights for software as <strong>&#8220;Services&#8221; is 18% GST rate (9% UTGST\/SGST+ 9% CGST) or 18%\nIGST.<\/strong> Temporary or permanent transfer or enjoyment of IPR with reference to\nsoftware comes under the ambit of <strong><em>service bracket 99733.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <\/em><\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Take_Away\"><\/span>Take Away<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>Intellectual Property Rights<\/em><\/strong> are those legal rights that encompass the privileges that the creator or owner of work enjoys with respect to something that they have created by using their artistic and creative mind. They get exclusive rights against the shady practices concerning misuse of work without their prior consent. If you have any concern or your mind is up to something related to the topic, i.e., <strong><em>GST on Intellectual Property Rights<\/em><\/strong>, then you must feel free to take the help of our <em><a href=\"https:\/\/corpbiz.io\/\"><strong>Coprbiz<\/strong><\/a><\/em> Experts. <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/gst-on-legal-services-in-india\/\">GST on Legal Services in India: Taxability of Legal Services under GST<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Through this Write-up, we are covering the applicability of GST on Intellectual Property Rights (IPR) related services and other information related to Intellectual Property. Intellectual Property rights are not much different from other property rights. Description of this right is available in Article 27- Universal Declaration of Human Rights. These rights grant the exclusive rights [&hellip;]<\/p>\n","protected":false},"author":19,"featured_media":10861,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[16],"tags":[669],"acf":{"service_id":"68"},"authorName":"Margesh Rai","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2024\/03\/Margesh.png","authorDescription":"With 10+ years of creative writing experience and 500+ blogs and thought leadership articles to his credit, Margesh Rai has left a significant impact in the field of content marketing. A published author and poet, Margesh Rai has experience writing for 20+ segments, such as Legal, Fintech, SAAS, Dairy, Real Estate, Hospitality, Recruitment, Sustainability, etc.","postViews":8481,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/10849"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/19"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=10849"}],"version-history":[{"count":14,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/10849\/revisions"}],"predecessor-version":[{"id":10868,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/10849\/revisions\/10868"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/10861"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=10849"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=10849"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=10849"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}