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Service Tax

Hema Desai (PRACTICING CA AND ENTERPRENEUR) (92 Points)

11 July 2011

We have Imported Software Liacence from USA and Sold it in India

Is Service Tax applicable in this case?

It is just purchsaed and Sold.

If not service Tax do we have to charge Sales Tax on Sales in India?

Pl advice.

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2 Replies

CA Unnikrishnan Nair N (Chartered Accountant) (2083 Points)
Replied 12 July 2011

Giving right to use or sale of IT software attracts service tax. Hence its import may attract service tax under reverse taxing. But the tax so paid is cenvatable and is allowed as set off against service tax liabiity. The incidence of customs duty has also to be examined . For packaged/canned softwares, If service tax has been paid, addtional duty of customs may not be leviable.

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Bhavesh Gupta (CA) (102 Points)
Replied 13 July 2011

When imported software is sold in India, the same should also attract VAT since the same is normally considered as sale of good and the rate of VAT would depend on the state in which it is sold. Therefore, there would be double taxation in the instant transaction.