New Delhi - The Delhi I-T Tribunal has held that no tax shall be deducted at source under section 194-I in respect of the amount remitted to the franchisees for use of infrastructure facilities. The assesseecompany was engaged in the business of providing computer education and training, through its own centres and also through franchisees.

The franchisee was required to provide the infrastructure facilities, like classroom facility, equipment, furniture, fixture and administrative set-up, against which the franchisee received infrastructure claims as per the agreement. The AO was of view that the real user of the infrastructure provided by the franchisee was the assessee and, hence, the amount of infrastructure fee paid was nothing but consideration for the use of infrastructure facilities on which assessee was required to deduct tax at source under section 194-I. The tribunal held that the primary objective of the agreement between the assessee and the franchisees was to share the revenue and certainly not to hire the premises provided by the franchisees. Therefore, the assessee was not liable to deduct tax under section 194-I in respect of the amount shared by it and remitted to the franchisees.

About The Franchising Association of India -  is a Membership Organisation of Franchisors, Franchisees, Vendors, Consultants, Financial Institutions and Students and others. Our services are dedicated to provide a one-stop shopping experience for franchising business and with membership of the prestigious World Franchise Council we have ongoing access to knowledge of the World accepted best practice related to Franchising in different areas of business activity as also networking contacts with the WFC member Franchising Associations in different parts of the world for generating new business opportunities for Indian entrepreneurs.

In recognition of the increasing role of franchising in the market place and the very beneficial positive contributions of franchising to the Indian economy, the franchisor and franchisee members of the FAI believe that franchising must reflect the highest principles and standards of fair business practices.

Mission
Tap the vast entrepreneurial energy available in the country by promoting the concept and practice of franchising in India.

Objectives
- Exchange and safeguard the business environment for franchising, both with regard to franchisors and franchisees
- Act as the resource centre for current and prospective franchisors, franchisees, the media and the Government.
- Disseminate knowledge to promote the concept of 'franchising' and propagate it as a healthy business practice.
- Establish a forum for discussion and deliberation on Franchising related matters and problems and help promote the interest of members by organising seminars, conferences and meetings.

Activities
To work towards achievement of the above mission and objectives our activities will include:
- Creation of appropriate forums for discussion of issues and problems related to Franchising.
- International linkages to promote - bringing in of foreign frachisors and best practice for doing business in India through Marketing India at International Expos and otherwise.
- Make representations to the Government with regard to legislative and other measures affecting the promotion of concept and practice of Franchising.
- Encouraging Bank and Venture Capital funding for franchisees.
-Publication of Franchising Successes
- Creation of India's most comprehensive Online Franchise Directory - which helps franchisors promote their business's and attract new franchisees.

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