AAR: Transfer of 'operational outlet' by ‘TEA POST’ taxable; Franchisee-Fee/Royalty received taxable at 18%

Gujarat AAR holds that lump-sum “Franchisee Fees” and monthly “Royalty” received by applicant, a Tea House chain, engaged in the business of running outlets in the name of ‘TEA POST’ under the franchisee agreement for right to use its trademark, brand name and other proprietary knowledge (Intellectual Property) given to the franchisee is taxable at 18% under Service Code (Tariff) 998396 - “Trademarks and franchises”; Rejects applicant’s classificat...