Hi friends,
One of my client was a franchisee. He was providing computer training to students. Now the issue is that the fees collected inclusive of srvice tax were deposited in the bank account of franchisor(in the name of franchisor only). And the franchisor transferred 80% of the amount collected by it from its bank account to the franchisee and retained the remaining amount.. Now, the franchisee has paid service tax on 80% received from the franchisor duly within time. But the service tax dept is demanding service tax on remaining 20% also on the ground that the services were provided by the franchisee.The factual position is that the franchisee never received the whole 100% of fees. Also service tax is paid on the amount actually collected by the assessee.The fees were directly deposited in franchsor's account. So is the contention of the dept correct?
Friends this is a urgent issue. Kindly help me with this. Your opinion wud b of immense help.
Thanx in advance
CAclubindia
