Service tax and vat on software products

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

22 June 2012 A software company charging us both Service tax for the 100% bill amount and VAT for full amount including Service tax. Generally we are purchasing a product, we may pay VAT it is service we can pay service tax. How VAT and service tax is applicable for the same product.

RENGARAJ R.K

RENGARAJ R.K (Expert)
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22 June 2012 For software company, many of the services are attracting service tax and hence service tax is charged. For local VAT, this may come under Works Contract and attracts VAT also. But VAT is not to be calculated after charging Service Tax. That means, if the product value is Rs. 100/- service tax and VAT is to be worked out on Rs.100/- only.

rengaraj r.k

Querist : Anonymous

Querist : Anonymous (Querist)

27 June 2012 VAT has been charged @5% and hence it has not come under works contact. They are charging as a product. My query is whether a product (here it software) has been treated as service by Central Excise and product by VAT. Kindly experts to confirm the correctness. Is there any notification / clarification in this regard

RENGARAJ R.K

RENGARAJ R.K (Expert)
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27 June 2012 Can you tell us the product name and your state (which state?)VAT schedule serial number to analyse it. But one thing is clear; where VAT is collected as a product, there is no Service Tax but Excise will be collected as manufactured commodity.

Querist : Anonymous

Querist : Anonymous (Querist)

29 June 2012 In TN, the ms office software has been sold by microsoft licence suppliers, it has been charged Service tax @ 12.36% on 100% amount and TNVAT @5% on 100% amount + Service tax.

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