In a bid to liberalise foreign technology agreement policy further, the government on Wednesday decided to allow all companies to make royalty payments without any restriction on the duration, on the automatic approval route.
The royalty payments would be made at the rate of eight per cent on exports and five per cent on domestic sales while the ceiling on the payment of lumpsum fee would continue to apply in all cases, an official statement said in New Delhi.
Presently, only wholly-owned subsidiaries are permitted to make payments of royalty of 8.0 per cent on exports and 5.0 per cent on domestic sales to their offshore parent on the automatic route without any restriction on duration of royalty payments.
Royalty payment by other companies are allowed for a period not exceeding seven years from the date of commencement of commercial production or 10 years from the date of agreement, whichever is earlier.
Now, companies, who have entered into foreign technology collaboration, irrespective of the extent of foreign equity, will have no restriction on duration.
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