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Courier franchisee-e_return

K.GANESH KARTHI (I.T.ASSISTANT) (54 Points)

05 January 2011

Hello,
Can a courier franchisee setoff the service tax paid by him to his franchisor against the service tax collected by him from customers vide courier bill? If so whether there is any limit and also kindly let me know how to state that in the ST3 form. Thanks for all those who replies!

k.ganeshkarthi

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3 Replies

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 05 January 2011

please read the franchise agreement between principal company and franchise, i belive that franchise is offered discounts and not entitled to account for service tax,
as general franchise does not issue any personal document but the way bill of principal company on which service tax is collected by principal through franchise,
if the franchise has own sets of collection waybill and its different from the principal then he can collect and set off .

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CA Shilpi Jain (Indirect taxation) (155 Points)
Replied 05 January 2011

The franchise service is an input service for your courier service? If yes then you can avail and utilise the same. It should be noted that in case the input service is used for providing only taxable service then full credit can be taken

Else if it is used for providing both taxable and non taxable then only proportionate credit available.

If used for non taxable services then no credit available.

There is specific section in the returns for disclosing the CENVAT credit details where the availment and utilisation can be mentioned

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K.GANESH KARTHI (I.T.ASSISTANT) (54 Points)
Replied 06 January 2011

Hello shilpi,

As told by you, the courier franchisee collects 'Service tax' vide service charges. The materials are despatched through franchisor network and they charges this franchisee service charge alongwith their service tax (input service). I think your earlier reply is fine. Also let me know in form ST3 in which column this input service has to be shown for setoff. Thanks!