TMI Blog2023 (3) TMI 577X X X X Extracts X X X X X X X X Extracts X X X X ..... g permission for adjustment of the receivables. In response to the request made, the Reserve Bank of India accorded the approval and the appellant made the remittance of the net amount of Rs. 3,38,13,31,677/- to McDonald s Corporation USA on 30 March, 2022. The impugned order in so far as it seeks to confirm the demand of service tax in regard to the first issue, namely non-payment of service tax on advertisement expenses incurred by franchisees deserves to be set aside. Non-payment of service tax on management consultancy services by wrongly claiming the same as export service - HELD THAT:- The matter needs to be remitted to the Commissioner to pass a fresh reasoned order in the light of the observations made above and the additional facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on 25.09.2019. The decision is reported in 2019 (9) TMI 1141- CESTAT NEW DELHI (McDonalds India Private Limited V.s Principal Commissioner of Service Tax, Delhi-I). 4. The appellant (McDonald's India Private Limited [McDonald's India]) was incorporated as a wholly owned subsidiary of McDonald's Corporation USA [McDonald's USA] with a view to facilitate development of the business of McDonald's in India. The appellant obtained service tax registration for 'franchisee service and management consultancy service' with effect from 24 November, 2005. 5. It is stated that McDonald's India does not operate any restaurant in India. It, however, entered into Franchisee Agreements with local franchisees, namely, Hard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s namely the first issue and the third issue arise for consideration in this appeal. These two appeals were decided by the Tribunal in the decision rendered on 25.05.2019 in the following manner:- First Issue Non-Payment of Service Tax on Advertisement Expenses Incurred by Franchisees 37. The order has grossly erred in interpreting the franchise agreement, thereby, including the cost of advertisement in the franchise fee received by the appellant. The amount incurred by the franchisee towards advertisement expenses, cannot, therefore, be said to be consideration paid by the franchisee to the appellant, as it is the franchisee themselves who are benefitting out of such expenses and not the Appellant. Third Issue Non-payment of Service Tax on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he instant case it has been stated by the appellant that the appellant had filed an application with the Reserve Bank of India on 17 August, 2021 for granting permission for adjustment of the receivables. In response to the request made, the Reserve Bank of India accorded the approval and the appellant made the remittance of the net amount of Rs. 3,38,13,31,677/- to McDonald s Corporation USA on 30 March, 2022. 9. It is seen that the two issues involved in this appeal have been decided in the earlier decision of the Tribunal in the case of the appellant. Thus, the impugned order in so far as it seeks to confirm the demand of service tax in regard to the first issue, namely non-payment of service tax on advertisement expenses incurred by fra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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