Whethjer vat or serviice tax; chargeble on ip transfer ?

Management Trainee

Dear All,

In the case of Eicher Good Earth Ltd. vs. CST, New Delhi 2012 (28) STR 279 (Tri-Del)  a landmark judgement was deliverer. It was held that :-

When transaction is read as whole it is indeed a contract for transfer of the right to use the Trademark for limited purpose but on a permanent basis. The facts that certain post transfer conditions are attached to transfer of the right does not change the nature of contract. The contract in question is in its pith and substance is not a ‘transfer of right to use’ and is more in the nature of permission to use the trademark which continues to be the property of licensor and therefore liable to service tax under IPR service.

This is an extremely important issue as it goes diametrically opposite to the Kerala High Court's ruling in Malabar Gold Pvt. Ltd. Vs CTO. hereby, it was held such agreement  of grant of user right in trademark wil be taxed vide charging VAT & not service tax. Henceforth, this begs the following question:-

  1. As of date what is to charged on such an agreement of exclusive(or non exclucive user right) of IP; VAT or Service Tax?

  2. Does anyone have any idea as to whether the said case appealed by EICHER GOOD EARTH in any higher forum ?

  3. Does anyone have a copy of the said order as delivered by the New Delhi Tribunal in the said above case?  Kindly provide us with one in case someone has a copy of the same.

Regards,

Sagnik Sanyal

 
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