Franchisee

[LARAIB AHMED]

Sir/Madam,

Whether the payment made for taking franchisee of a restaurant service is a capital payment and can this be treated as an assest and amortisation can be taken thereon.

and Whether receipt made under franchisee agreement for giving the francisee is chargeable to service tax????

Please respond with both the prospect

[Mahir S]

Sir,

Regarding your second query, the receipt made under franchisee agreement for giving the franchisee is chargeable to service tax. However, exemption is available if such receipt is less than ₹ 10 lacs p.a.