Service tax

Queries 776 views 4 replies

saravana kumar

Student

50 Points Joined November 2011

My friend started an institute in Mar 2012 where coaching classes conducting for air hosts. For this, he got franchisee from Time Institute, Bangalore and he pays 10% royalty on candidate’s fee to them.

Time Institute is paying service tax according their business.

But, he used only their name & style and all the income and expenses are maintained by him.

Here, kindly clarify whether my friend comes under service tax liability or not.

Apart from this, he is also conducting other classes like spoken English in name of Prime Academy at the same premises. He maintains two bill book one in prim academy and another one in the name of Time Institute for Air Hosting classes. Is it ok or not?

Replies (4)

NITIN

96 Points Joined September 2010

Yes, he will defenitly come under the service tax liability under the head Auxilary Services and please ensure that the limit of 10 lak has been crossd by him.

Abhijeet Jain

169 Points Joined January 2009

Yes, he will liable to pay service tax after exceeding the gross billing of Rs. 10 Lakhs in previous F.Y. If in previous F.Y. turnover is less than the specified limit then in the current F.Y. till 10 lakhs he is not required to charge service tax, after crossing the limit he is required to charge service tax.

pulkit gupta

CA final student

160 Points Joined January 2008

both the services will be subject to service tax as they are being provided under a brand name of a 3rd person.

saravana kumar

Student

50 Points Joined November 2011

Originally posted by : pulkit gupta
	both the services will be subject to service tax as they are being provided under a brand name of a 3rd person.

Sorry,

He got franchisee only for Time Institute (Training for Air Hostess) not for Prime Academy. Prime Academy is his own brand where he is conducting Spoken English class only. His total billing is below to 10 laks in previous FY. Kindly clarify the following three doubts.

1. Whether his both services come under Service Tax liability or not as services relate to education.

2. If he is liable to ST, please advice whether gross billing should be reached 10 laks in each service or clubbed as he is maintaining bill in two names ie Time Institute and Prime Academy.

3. As the Time Institute is paying Service Tax for 5 years, would he pay ST even his billing does not cross 10laks.