My client is engaged into MLM business which collects Rs 1500 from members and gives them a joining kit of Total Value Rs 150.
Now Suppose i Show the bifurcation of Rs 1500 as Follows
a) Rs 200 for sale of product.
b)One time membership fees rs 1300 as registration fees.
---Question
1)Than whether service tax would be applicable on above Rs 1300 if yes than under which service it would come for registration.
2) What would be the remedy to avoid service tax liabilty.
Service Tax Applies to Full Rs 1500 in MLM Business Membership Under Section 67 of Finance Act, 1994. An individual inquired about the applicability of service tax on a multi-level marketing (MLM) business, where members pay Rs 1500, including a Rs 150 joining kit. The query focused on whether the Rs 1300 registration fee is subject to service tax and under which category it should be registered. A response clarified that service tax applies to the entire Rs 1500, as per section 67 of the Finance Act, 1994, since the joining kit is integral to the membership. Another participant asked for more information about taxes in MLM companies. (AI Summary)
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