| Q.1 |
What
is the taxable service under Franchise Service? |
| Ans. |
Franchise
Service is a service provided by franchisor to a franchisee
under a specific type of agreement known as franchise agreement.
This agreement includes the franchisee being obliged to follow
the concept of business operation, managerial expertise, market
techniques etc. of the franchisor and is under an obligation
not to engage in selling, producing or providing similar goods
or services, identified with any other person. The franchisee
is required to pay to the franchisor, directly or indirectly,
a fee which is chargeable to Service Tax. |
| Q.2 |
If
the franchisor is not normally resident of India, who has to
pay Service Tax? |
| Ans. |
As per
Service Tax Rules in all such cases the service receiver in
India would be liable to pay Service Tax on behalf of the service
provider. |
|
