Service tax and vat on software

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mukesh garg (Querist)
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16 September 2013 Dear All

will you please tell me whether Service tax and vat both are charged while trading the software, software license, .

Also tell how the same is charge? i.e. whether service tax charge first or vat.

thanks in advance

Ganeshbabu K

Ganeshbabu K (Expert)
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16 September 2013 Service tax is applicable for sale of software licence as a 'providing right to use for specific period'

in case of software "right to use" is debatable as many state vat acts says it is transfer of right and want to levy VAT where as service tax dept says it is not transfer of right as there is restrictions on right to use,,,so it treat it as providing right to use and charges service tax
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So Now as a general practise of industry both service tax and vat is charging on software sales
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both has to caluculated on 100 only
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means for 100 rs software,, 12.36% of service tax and vat rate as per their state statute

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