Franchise fee, Service Tax

[rishi mohan]

We have taken a franchise from a foreign company located outside India for using their brand image. For this we enter into an agreement and paid franchisee fee. We also paid royalty at certain percentage on the fee paid.

As a franchisee are we liable to pay service tax on reverse charge basis on the above?

Posts / Replies

[Madhukar N Hiregange]

Yes liable under reverse charge

[Naveed S]

Yes, service tax liability arises under reverse charge mechanism.