A public ltd co. intends to enter into a franchise agreement. My queries :
1. It collects a deposit, which will be non-refundable, provided the prospective franchisee meets the requirements/ conditions. If those conditions are not met, the deposit is refunded and there would be no further legal binding on both the parties. Whether service tax needs to be collected on the advance? What would be the accounting treatment of this advance?
2. Course materials would be given to the franchisee as part of the license agreement. Such materials could be either the franchisor's own content or that of microsoft/ oracle, etc. Whether service tax needs to be collected on this course materials sold?
3. Franchisee would collect fee from students which will comprise of components like courseware, tuition fee, royalty payable to franchisor, etc. Whether franchisee needs to collect service tax on the whole amount from students or on the fee excluding courseware component?
4. Are there any list of vocational training exempt from service tax?
5. What are the states in India which are exempt from service tax?
Tks in advance for yr time and replies.
CAclubindia
