https://www.taxtmi.com/caselaws?id=442512 A distributorship arrangement is not taxable as franchise service unless the agreement grants a representational right enabling the recipient to act as the franchisor in the market and lose its independent identity. Here, the distributors were appointed for marketing, promotion and distribution of products, and the exclusivity fee functioned as a refundable deposit linked to the distributorship term. The agreement did not make the distributors represent the appellant as franchisees, so the statutory definition of franchise was not satisfied. The service tax demand, interest and penalties therefore could not be sustained. en-us Tue, 29 Aug 2023 00:00:00 +0530 Wed, 30 Aug 2023 11:03:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=442512 A distributorship arrangement is not taxable as franchise service unless the agreement grants a representational right enabling the recipient to act as the franchisor in the market and lose its independent identity. Here, the distributors were appointed for marketing, promotion and distribution of products, and the exclusivity fee functioned as a refundable deposit linked to the distributorship term. The agreement did not make the distributors represent the appellant as franchisees, so the statutory definition of franchise was not satisfied. The service tax demand, interest and penalties therefore could not be sustained. Case-Laws Service Tax Tue, 29 Aug 2023 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=442512