Home > Articles > Service Tax > Service tax on packaged software - New Notification

Please Wait ..

Sign-in to your account


Username:
Password:

Remember Me

Forgot your password?

Sign-up now



Join CAclubindia.com and Share your Knowledge. Registered members get a chance to interact at Forum, Ask Query, Comment etc.




Service tax on packaged software - New Notification

 Comments  

     on  29 December 2010    

Report Abuse Print This Page

 

Through Notification No. 53/2010 Service Tax CBEC has provided conditional exemption from service tax to the right to use packaged/canned software. Prior December 21, 2010 Notification No. 2/2010 and 17/2010 was present for similar kind of exemption. Pasted below depicts the conditions to be fulfilled prior and post December 21, 2010 for availing exemption from Service tax:

 

Prior December 21, 2010

 

  1. Software to be intended for single use and packed accordingly

  2. The document providing the right to use packaged or canned software, by whatever name called, if any, is packed along with the software

  3. (a) In respect of software manufactured in India - The manufacturer, duplicator, or the person holding the copyright to software has paid the appropriate duties of excise on the entire amount received from the buyer

           (b) In case of software Imported into India - The importer has paid the appropriate duties of customs on the entire amount paid by him

 

Post December 21, 2010

  • The value of the packaged or canned software domestically produced or imported, for the purposes of levy of the duty of central excise or the additional duty of customs, if imported, as the case may be, has been determined under section 4A of the Central Excise Act, 1944

  • A declaration made by the service provider on the invoice relating to taxable service referred in clause (v) of Section 65 (105) of the Finance Act, 1994 that no amount in excess of the retail sale price declared on the packaged or canned software has been recovered from the customer

  • (a)  In respect of software manufactured in India - The manufacturer, duplicator, or the person holding the copyright to software has paid the appropriate duties of excise on the entire amount received from the buyer

(b) In case of software Imported into India - The importer has paid the appropriate duties of customs on the entire amount paid by him


According to the new exemption Notification condition of single use of packaged software and document providing the right to use to be packed along with the packaged software are removed. However to avail exemption from service tax post December 21, 2010 following conditions needs to be fulfilled:

 

o  Excise/Custom duty needs to be paid on the value of the packaged software

o  Value of the packaged software needs to be determined according to Section 4A of the Central Excise Act, 1944 (MRP based valuation of Goods)

o  A Declaration is required on the invoice for the value of packaged software

 

This new Notification seeks to provide better clarity as far as exemption from service tax is related withretail sale of packaged or canned software. However certain questions are still unanswered:

 

o  What will happen if the packaged/canned software is purchased by corporate/institutional buyers?

o  How the exemption is to be availed when packaged/canned software is downloaded electronically?

 

Published in Service Tax
Source : No Source Specified
Views : 5056

Other Articles by Abhijeet Jain




5 Comments for this Article

Related Articles




View other articles from this category



Other Newer Articles







Submit



Featured Article Writer of the Month


Quick Links



 











back to the top