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

Franchise Services in Jammu and Kashmir Exempt from Service Tax Under Section 64 of Finance Act 1994 A company providing franchise services in Jammu and Kashmir inquired about the applicable service tax rate, whether 6% or 12%, for services up to and after June 30, 2012. The response clarified that under Section 64 of the Finance Act 1994, service tax does not apply to Jammu and Kashmir, making such transactions non-taxable. Consequently, there is no service tax liability or eligibility for CENVAT credit on these services. This position remained unchanged even after the introduction of the Negative List-based taxation, as Section 64 was not amended.