The benefits/ incentives available for approved R & D Centres are:
Example of the tax saving:
|Turnover||Rs. 10000.00 Lacs|
|R&D Expenses||Rs. 50 Lacs (Capex) +50 Lacs (Opex)|
|Total company Expenditure||Rs. 8000.00 Lacs including R&D|
|Tax (@30% rate) in case of NO 35(2AB) DSIR Recognition and approval||Rs. 600.00 Lacs|
|Tax (@30% rate) in case of “35(2AB) DSIR Recognition and Approval”:||Rs. 557.25 Lacs|
|Total saving in tax:||Rs. 42.75 Lacs for one year.|
The In-house R&D units applying for recognition to DSIR are expected to be engaged in innovative research & development activities related to the line of business of the firm, such as, development of
R&D activities in Shoe industry which can fall under Research definition for DSIR In house R&D recognition:
It may be noted that market research, work & methods study, operations & management research, testing & analysis of routine nature for operation, process control, quality control and maintenance of day to day production, maintenance of plant are not considered as R&D activities.
This is with reference to notification No 45/2017-Central Tax (Rate) and 47/2017-integrated tax rate dated 14.11.2017 issued by the Government of India, Ministry Of Finance, and Department of revenue towards exemption pf GST under certain conditions.
As per the amendments made in the notification regarding the rate of GST in respect of Research organizations other than hospitals, the concessional rate of GST is applicable for procurement of following items for research activities.
To get the concessional rate of GST, the organization will have to provide a certificate to the supplier at the time of supply stating that the said goods are required for research purpose only.
Concessional GST rates for such items are mentioned below.