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TMI Blog2016 (9) TMI 491X X X X Extracts X X X X X X X X Extracts X X X X ..... ay the License Fee. All intellectual property rights and other rights, including without limitation patents, design rights, trademarks, copyright and know-how, relating to the IP shall all times be the exclusive property of H&M GBC, Sweden. Accordingly, services received by the applicant fall under the declared services and would attract the levy of Service Tax under reverse charge mechanism. Service tax liability - Whether the sales and Business Support Fee paid by the applicant to H&M GBC is liable to Service Tax in terms of the Finance Act, 1994 - Held that:- Sales and Business Support Agreement will be covered in the definition of “service’ under Section 65B (44) of the Finance Act, 1994. Section 68 (2) provides that in respect of such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Apparel, Footwear, Cosmetics and Accessories, Handbags, Home furnishing products, Children Products, Outdoor utility products etc. under the brand 'H&M'. H&M AB, resident in Stockholm, Sweden, is the parent company of the H&M group of related entities. H&M AB currently operates as the centralized administrative entity of the global H&M operation and is the owner of all H&M intellectual property related to the H&M brand and trademarks. H&M AB‟s main responsibilities include the development of the overall strategic direction of the H&M Group and the maintenance and ownership of the H&M brand and trademarks. H&M AB has granted global exclusive rights to H&M GBC to exploit "H&M concept' and associated trademarks, and to implement the mar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration and Sub-License Agreement: Applicant has entered into a Foreign Collaboration and Sub-License Agreement with H&M GBC dated 01.04.2014 for obtaining rights to exploit 'H&M‟ brand for sale of goods in India. The consideration for this agreement will form part of the Trademark License Agreement and a consolidated consideration will be paid by the applicant to H&M GBC for both the Agreements. b. Trademark License Agreement: Applicant has entered into a Trademark License Agreement with H&M GBC which is effective from 01.04.2014 for the use of the trademark rights with respect to the 'H&M Concept‟ for distribution and retailing of the said goods in India. The Agreement allows the applicant to use the H&M trademark and its gra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Trade Mark/ License Fee and the payment made in terms of the foreign collaboration agreement by the applicant to H&M GBC is liable to Service Tax in terms of the Finance Act, 1994? B. Whether the sales and Business Support Fee paid by the applicant to H&M GBC is liable to Service Tax in terms of the Finance Act, 1994? 6. The applicant has entered into Trademark License Agreement with M/S H & M Hennes & Muritz GBC AB to use the trademark rights and other intangible property in the buying and sales of fashion garments and related products and related activities in the Indian Territory. The applicant is required to pay the License Fee subject to its earning at arm‟s length target margin for using of Trademark. All intellectual pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntellectual property rights and other rights, including without limitation patents, design rights, trademarks, copyright and know-how, relating to the IP shall all times be the exclusive property of H&M GBC, Sweden. Accordingly services received by the applicant fall under the declared services and would attract the levy of Service Tax under reverse charge mechanism. 7. The applicant also propose to receive various business support services i.e. Business Planning, strategies, operational & administrative support etc. and make a variable annual payment to H&M GBC, Sweden. In this case also, Sales and Business Support Agreement will be covered in the definition of "service' under Section 65B (44) of the Finance Act, 1994. Section 68 (2) prov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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