𝗖𝗘𝗦𝗧𝗔𝗧 𝗕𝗮𝗻𝗴𝗮𝗹𝗼𝗿𝗲 𝗥𝘂𝗹𝗶𝗻𝗴 𝗼𝗻 𝗙𝗿𝗮𝗻𝗰𝗵𝗶𝘀𝗲 𝗔𝗴𝗿𝗲𝗲𝗺𝗲𝗻𝘁 𝗮𝗻𝗱 𝗧𝗮𝘅 𝗟𝗲𝘃𝘆 📢 𝗧𝗵𝗲 𝗧𝗿𝗶𝗯𝘂𝗻𝗮𝗹 𝗵𝗲𝗹𝗱: "Since there is no profit-sharing or asset contribution, the agreement is a franchise, not a joint venture, and thus attracts service tax."

🔍 𝗙𝗮𝗰𝘁𝘀: 𝗖𝗼𝗺𝗽𝗮𝗻𝘆: M/s. Kitco Ltd. 𝗜𝘀𝘀𝘂𝗲: Does the appellant need to pay service tax on the Franchisee Service under the agreement? 𝗔𝗰𝘁𝗶𝘃𝗶𝘁𝘆: Provided Franchise Services under an agreement with the Institute of Hotel Management Studies.

⚖️ 𝗝𝘂𝗱𝗴𝗲𝗺𝗲𝗻𝘁: The Tribunal identified the arrangement as a franchise, not a joint venture, due to the absence of profit-sharing or asset contribution. It attracted service tax under the Finance Act (post-2005). However, penalties under Sections 76, 77, and 78 were deemed unsustainable, and the appeal was partially allowed.

𝗖𝗮𝘀𝗲 𝗜𝗻𝗳𝗼𝗿𝗺𝗮𝘁𝗶𝗼𝗻: 𝗧𝗶𝘁𝗹𝗲: M/s. Kitco Ltd. vs. The Commissioner of Central Excise and Service Tax 𝗦𝗲𝗿𝘃𝗶𝗰𝗲 𝗧𝗮𝘅𝗔𝗽𝗽𝗲𝗮𝗹 𝗡𝗼. 5of 2010 𝗢𝗿𝗱𝗲𝗿 𝗗𝗮𝘁𝗲: 07 July 2023 📜 This ruling clarifies franchise versus joint venture definitions, highlighting tax implications based on the presence or absence of profit-sharing and asset contributions.