25 March 2016
Aryan Cafe is a franchisee owner of Real Food(Registered Trade Mark ). Terms of business is aryan cafe will have to pay Rs 300000 non refundable franchisee fees and then after Rs. 10000 per month as a royalty irrespective of sales. So is there SSI exemption is available with aryan cafe or not? Thank You
25 March 2016
As far as service tax goes, the billed turnover is what matters not the term of your franchise. Suppose during the first year your turnover is just 5 lacs. You may have paid royalty of Rs.1.2 lacs, it is immaterial for service tax purposes. You are required to register for service tax once your turnover exceeds Rs.9 lacs and pay service tax once your turnover exceeds Rs.10 lacs. Irrespective of the turnover, if you are registered with service tax, you can claim CENVAT Input Credit on royalty paid and the same can be carried forward without any time limit, till utilized.
YES AYAN CAFE IS ENTITLED TO SMALL ENTERPRISES EXEMPTION.
CAclubindia
