S.No. Proposal Recommendation
Recommendation:
18 To clarify
the GST It is proposed that to bring clarity, the residuary rate entry for
Heading 9973 in notification No. 11/2017-CT (R) dated
rate
28.06.2017 may be split in two parts as follows.
applicable
Existing Proposed
on right to
use Description Rate Description of Rate
Intellectual of Serv ices (%) Services (%)
SI. 17 Heading 9973 (Leasing or rental services, with or
Property
without operator)
and sim ilar
(viii) Same rate of (viia) Leasing Same rate of
products
Leasing or Central Tax or renting of Central Tax
other than
rental as on supply goods as on supply
IPR
services, of like goods of like goods
with or involving involving
without transfer of transfer of
operator, title in goods title in goods
other than (viii) Leasing
(i), (ii). (iii), or rental
(iv), (v), (vi) services, with
and (vii) or without
above operator, other
18
than (i), (ii),
(iii), (iv), (v),
(vi), (vii) and
(viia) above
Discussion:
1. Heading 9973 of scheme of classification of services under
GST includes "Group 99733: the licensing services for the right
to use intellectual property and sim ilar products". However,
the rate notification No. 11/2017-CT (R) dated 28.06.2017,
prescribes rate only for transfer or permitting the use or
enjoyment of Intellectual Property Rights (IPR). No rate has
been prescribed for transfer of intellectual property and sim ilar
products other than IPR. IPR, as held in several decisions of the
Tribunal and the Courts, refers to rights in intellectual property
protected by the relevant IPR law in force. Intellectual property
not protected by IPR law in force cannot be termed as IPR.
2. The residuary entry for the Heading 9973, i.e entry SI. No.
17(viii) prescribes GST rate as "same rate of Central Tax as on
supply of like goods involving transfer of title in goods".
However, the intellectual property does not have underlying
goods and thus the prescribed rate does not apply to transfer
of intellectual property and sim ilar products other than IPR.
