franchise commission

[sarat sahoo]

Service tax on Franchise commission by an edcational institute is elligible for cenvat credit by which act.......

[KASTURI SETHI]

Eligible under Rule 2(l) of Cenvat Credit Rules, 2004. This service does not fall in the exclusion category of 'Input Service defined under Rule 2(l). It is natural that such credit is required to be utilised for providing output taxable service.

[Ganeshan Kalyani]

Sir, I agree with the views of Sri Kasturi Sir.

[Ganeshan Kalyani]

Sir, the nexus of input service to output service is must for taking credit. Thanks.

AI Summary

Cenvat credit available for franchise commission when the service is an input service with nexus to taxable output. Service tax on franchise commission payable by an educational institute qualifies as an input service under Rule 2(l) of the Cenvat Credit Rules, 2004 and is not excluded; claiming credit requires a nexus between that input service and the provider's output taxable services and the credit must be utilised for output taxable services.