FRANCHICE SERVICES PROVIDED IN J&K

[satbir singhwahi]

A LTD CO HAS PROVIDED FRANCISEE SERVICES IN J& K , IT IS ALSO AVAILING CENVAT SO , IT IS LIABLE TO PAY SERVICE TAX ON SUCH SERVICES IN J& K . WHAT IS THE RATE 6 % OR 12%FOR PERIOD UPTO 30.06.12 AND AFTER.

[Nagabhushan Bhushan]

Dear Sir,

Position upto 30.06.2012:-

As per Section 64  the Finance Act 1994 the act applies to whole of India except Jammu and kashmir. Therefore any service provided to jammu and kashmir is not a taxable transaction under service tax. Therefore you are not liable to pay service tax on such transaction. 

As there is no liability of service tax as mentioned above so no question of availment of cenvat credit.

 

Position after 30.06.2012:-

The position continues as mentioned after the introduction of Negative list based taxation above because section 64 of Finance Act has not been deleted. 

 

   

AI Summary

Service Tax Exemption for services in Jammu and Kashmir continues where Section 64 excludes that territory from taxation. Franchise services supplied in Jammu and Kashmir were not subject to service tax because Section 64 of the Finance Act, 1994 excluded that territory; accordingly, no service tax liability arose and no CENVAT credit could be availed. That territorial exclusion remained effective after the transition to negative list taxation because Section 64 was not deleted, so such services continued to fall outside the service tax charge and related CENVAT treatment absent legislative amendment.