Franchisee services at Jammu

[Satbir singh wahi]

We are located in Delhi and Franchisee are appointed in Jammu and consideration is received from there.

1. Whether this is exempted service ?

2. If yes , Then we reverse input by 7% ?

3. Whether sbc is to be paid in cash?

4. Where to show this in ST 3.

AI Summary

Place of provision of services: supplies to a non taxable territory are outside service tax; reverse credit and report in returns.
Franchisor in taxable territory receives franchise fees from a franchisee in a non taxable territory; under the Place of Provision Rules the place of supply is the recipient's location (Jammu) so the service is not subject to service tax, SBC is not leviable, and any availed input credit must be reversed at the prescribed rate. The Reverse Charge entry cited applies to services supplied from non taxable to taxable territories and therefore does not cover this fact pattern. Report reversals in the ST 3 return cenvat/credit columns.