What is R & D Cess

It is a tax payable on import of technology.

If technology is imported, we have to pay technical fees/consultancy/ royalty or know-how. On this R & D cess is payable at 5%


Treatment of R & D cess in service tax

In service tax, if we are using such technology for providing service then we can reduce this cess while calculating service tax payable

Though it is called exemption, it is actually in nature of deduction.


Conditions to be fulfilled to claim deduction

  • It should be paid before the date of service.
  • Maximum period os 6 months from date of invoice
  • Necessary records to be maintained to establish link between invoice date and cess payment
  • Note:- In case of associated enterprise, we consider date of credit in books and not invoice date


[Notification No. 14/2012-S.T, dated 17.03.2012]



  1. Exemptions and Abatement
  2. Different Exemptions

About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 11 years. He also provides Accounts Tax GST Training in Delhi and Pune.