Is service tax chargeable on sale of self generated software

This query is : Resolved

deepak khandelwal (Querist)
Follow

26 January 2015 Company's main business is to develop and to provide service or directly sale of self generated software.

Is service tax chargeable, if the company sales self generated software amounting Rs. 1000000 ?

deepak khandelwal

deepak khandelwal (Querist)
Follow

26 January 2015 Or whether VAT to be chargeable ?

CA Anjana Grover

CA Anjana Grover (Expert)
Follow

26 January 2015 Depending upon the situation following would be applicable :

1. Onsite Development of Software – Liable to Service Tax

2. Advice, consultancy and assistance on matters relating to information technology software – Liable to Service tax

3. Where client specific software is developed for the client in such a way that the intellectual property developed belongs to the client/customer (just like a job-work) from the very beginning without the creator retaining any ownership rights over the same, the arrangement would be one of service and not sale of goods. The same has been confirmed under Sasken Communication Technologies Ltd Vs Joint Commissioner of Commercial Taxes,Bangalore (2011 (4) TMI 566 – Karnataka High Court)

4. Sale of License – Liable to Service tax if no transfer of right to use while liable for sales tax if transfer for right to use under deemed sale concept. Largely would depend on case to case basis.

5. Customised (Bespoke) Software Developed and Implemented:- Liable to both Sales tax and Service tax. In this context, one important ruling can be discussed here. The ruling is by foreign court i.e. in case of Levob Verzekeringen BV and OV Bank NV v. Secretary of State for Finance, Netherlands [2012] 22 taxmann.com 174 (ECJ) wherein it was held that Supply of basic software along with subsequent customisation thereof to meet requirements of customer and training to his employees under a single contract is a single indivisible supply of service and whole of the receipts are liable to service tax on Dominant nature test.

6. Manpower Supply :- Liable to Service tax

7. Updates and Upgrades: – To be treated status quo with implications in case of software.

8. Cloud Sharing :- Liable to Service tax

9. Online database Sharing :- Liable to Service tax

10. Value added services: – Liable to Service tax like subscription for pro-chat, premium services etc. If charges for transfer the same shall be liable to VAT.

Regards

CA Anjana Grover

CA Anjana Grover (Expert)
Follow

26 January 2015 Also if services provided by the entity exceeds Rs.10 Lakhs than service tax has to be paid.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Join the CA Students WhatsApp Community for ICAI Updates, Trending Courses & Notes!

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

Nithish Kothari

ANUPAMA L KANT

Fahima Malik

velichety.l.narasimharao

T.N.Reddy

Subscribe Now

Is service tax chargeable on sale of self generated software

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Senior Executive

Manager- Finance and Compliance

GST CONSULTANT

GST CONSULTANCY

Accountant

CA Final

Article Assistant

Associate CA