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2016 (12) TMI 821 - HC - VAT and Sales TaxLevy of VAT - Franchise agreement - whether Franchisee agreement amounts to transaction of "transfer of the right to use goods" for the purpose of levy of Value Added Tax (in short 'VAT") or the factum that petitioner since paying service tax, whether will stand absolved from liability of tax under VAT Act, 2008"? - Held that: - Right to use property, i.e., Brand name for consideration is a 'sale' under the definition of 'sale' in VAT Act, 2008 read with Article 366 (29A) of Constitution and on amount of consideration, VAT is chargeable. If there is simultaneously other activities which may come within the definition of 'service', petitioner may be liable to pay "service tax" on that or those aspect(s) but consideration of transfer of right to use Brand name, i.e., goods, is exigible to VAT having satisfied the definitions of "goods" and "sale". Grant of non-exclusive licence to Franchisee for use of Brand name of petitioner under the agreement for consideration is exigible to tax under VAT Act, 2008. If there is a composite transaction, part whereof amounts to sale of goods and other aspects amount to service, both taxes on different aspects are leviable and dominant intention test is no more available. Petition dismissed - decided against petitioner.
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