20 December 2012
Dear Sir, one of my client is franchise of Frankfinn Delhi,they are liable to pay service tax on fees collected, at the same time Frankfinn is charging 25% royalty on fees collected(Excluding service tax),they are also charging service tax on royalty, My Query is can we get the credit of service tax paid on royalty to the service tax payable on fees collected please help me on this issue
As per Rule 2(i) of CCR,2004 ie definition of Input services which consist three parts ie Specific part,inclusive part and exclusive part. Your service is covered under specific part ie any service used to provide output service, hence you can avail the credit of service tax paid on franchise service.
CAclubindia
