Save Rs 499 on a 2-Year Ad-Free CAclubindia Pro Membership. Subscribe Now!

Service tax on royalty to foreign company

Notifications 1194 views 2 replies

Lokesh Gautam

Company Secretary

29 Points Posted on 21 February 2013

dear learned member,

greetings for the day,

An Indian Private company seeks franchise from a US based company for same realestate consultants activities. monthaly royalty will be paid to that foreign company.

kindly advise that if it attaracts any serveice tax provions.

waiting for an expert response.

thanks in advance.

Regards

Lokesh Gautam

9971518896

Replies (2)

Prabhat Kumar

Advocate & Consultant

1912 Points Posted on 22 February 2013

Since you are receiving Franchise Services from a person situated in non taxable territory, you are liable to be taxed under reverse charge(S.66A). So, there is liability of Service Tax on you.

Lokesh Gautam

Company Secretary

29 Points Posted on 26 February 2013

Originally posted by : Lokesh Gautam
	dear learned member, greetings for the day, An Indian Private company seeks franchise from a US based company for same realestate consultants activities. monthaly royalty will be paid to that foreign company. kindly advise that if it attaracts any serveice tax provions. waiting for an expert response. thanks in advance. Regards Lokesh Gautam 9971518896