Import duty on purchase of software online

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

10 October 2012 Dear Sir / Madam / Friends,

We are a Software developing Company based in Gandhinagar IT/ITES SEZ. I have a query regarding import of Software through Internet. we have recently purchase a software from US based software company. The US based co. will give us the access code of the software through Email. We will have to download the software from US based companies website through internet by using code nos and install in our system. Further we have received a user manual with CD through post. We have also filed a Form 15CA & Form 15CB. My query is how i cleared this process in SEZ as they asked for a import clearance papers. But actully we had not paid any thing or disclose anywhere regarding this.

Futher, as our unit is in SEZ, we are going to claim a service tax exemption regarding this.

You all requested to please resolve my query at the earliest as the transaction was already done and paper work is pending @ SEZ.

Sunil

Sunil (Expert)
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10 October 2012 There is specifically no import duty. Even downloading of digital content comes under online database and retrieval service. As per Place of provision rules, the location of the provider is place of service. Therefore service tax is payable by provider only if the provider is located in taxable area.

However, if you order canned software online to be sent to you in India, you have to pay custom duty. If you pay a courier or delivery charge or any other service charges that is identificable in the invoice seperately, then location of receiver will be the provision of service and if in taxable area, service tax on these service charges are payable on reverse charge basis.

The location of service is location of provider for Online database and digital content retrieval.

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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10 October 2012 MUST READ:

http://www.cbec.gov.in/customs/cs-act/formatted-htmls/cs-act-ch10a.htm

http://www.eximguru.com/exim/indian-customs/customs-manual/special-economic-zone-scheme.aspx