9911796707
TMI Blog2018 (3) TMI 709X X X X Extracts X X X X X X X X Extracts X X X X ..... is only for the right to sell or manufacture goods or to provide service or undertake any process identified by the franchisor etc. The payment required to be paid for use of the IMA Mental Arithmetic course have been indicated as 25% of the gross fees collected. As per section 65(105)(zze), the taxable service is that given to a franchisee by the franchisor in relation to franchise . This being so, only those amounts directly relatable to the representational right granted by the franchisor to the franchisee and the royalty/franchisee fee towards that right would alone be part of taxable for the purpose of levy under this category. The tax liability for the appellant in respect of franchisee appointed by them within India will not in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 80 of the Finance Act. However, the appellants are aggrieved by the confirmation of tax liability on the remaining amounts and have come in appeal. 2. Today, when the matter came up for hearing ld. counsel Shri G. Natarajan for the appellant submitted as follows:- 2.1 The appellants are not disputing the demand of service tax of ₹ 5,432/- on franchisee fee paid to the Malaysian principal under reverse charge post 18.4.2006. 2.2 The appellant is not contesting the demand of royalty fee and franchisee fee received from the Indian franchisees. 2.3 However, they contest the following amounts received from the students on the ground that they are not at all relevant to the franchisee service provided by them viz. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both sides. 5. The definition of Franchise and Franchisor as given under Section 65(47) and 65(48) of the Finance Act, 1994 are as follows:- Franchise is granted representational right to sell or manufacture goods or provide service or undertake any process identified with franchisor, whether or not a trade mark, service mark, trade name or logo or any such symbol, as the case may be, is involved Franchisor provides concepts of business operation to franchisee including know-how, method of operation, managerial expertise, marketing technique or training and standards of quality control except passing on the ownership of all know-how to the franchisee The franchisee is required to pay to the franchisor, directly or indir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the above paragraphs. As per section 65(105)(zze), the taxable service is that given to a franchisee by the franchisor in relation to franchise . This being so, only those amounts directly relatable to the representational right granted by the franchisor to the franchisee and the royalty/franchisee fee towards that right would alone be part of taxable for the purpose of levy under this category. In view of the above, we find favour with the appellant. The impugned order is therefore modified to the extent of holding that the tax liability for the appellant in respect of franchisee appointed by them within India will not include the amounts relatable to admission fee, tuition fee, competition fee and course instructor fee. We do not int ..... X X X X Extracts X X X X X X X X Extracts X X X X
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