Soft ware export

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latif.bhada (Querist)
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04 May 2013 DEAR SIR

IS SERVICE TAX APPLICABLE ON THE EXPORT OF SOFTWARE. IT IS NECESSARY TO TAKE THE REGISTRATION

WHAT ARE THE OTHER BENEFIT ON THE EXPORT OF SOFTWARE PLEASE GIVE IN DETAIL

Nilesh

Nilesh (Expert)
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04 May 2013 Service tax is not applicable on export of software (service).

It is recommendatory to obtain registration.

You can claim refund of service tax paid on input services.

Nilesh

latif.bhada

latif.bhada (Querist)
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06 May 2013 One of my client is service provider of web agency which deal with web design, web development , website maintainance.do he is liable to pay service tax, he should take the registeration and file the quarterly statements.The compnay is based in surat ,Gujarat.

Thanks.

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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25 July 2025 Here’s a clear explanation about **service tax and software export** (based on laws before GST was introduced):

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### 1. **Is Service Tax Applicable on Export of Software?**

* **No, service tax is NOT applicable on export of software services** because export of services is treated as a **zero-rated supply** under the Service Tax Law.
* To qualify as export of service:

* The service provider must be located in India.
* The service recipient must be located outside India.
* The place of service should be outside India.
* The payment for the service should be received in convertible foreign exchange or in Indian rupees wherever permitted by RBI.

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### 2. **Is Registration Necessary?**

* It is **recommended to take service tax registration** even if you are only exporting services.
* Registration allows you to:

* File returns regularly.
* Claim **refund** of service tax paid on **input services** used to provide exported services (under **CENVAT Credit Rules**).

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### 3. **Benefits on Export of Software Services**

* **Refund of CENVAT credit/input tax credit:** You can claim refund on service tax paid on input services (like internet, software tools, consultancy, etc.) used in software export.
* **Zero-rated supply:** No output service tax liability on exported services.
* Helps improve **cash flow** since you can get back the tax paid on inputs.

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### 4. **Regarding Web Agency Service Provider**

* If your client provides **web design, web development, and website maintenance services**:

* Service tax is **applicable** on these services (except where exempt).
* He **must obtain service tax registration** if his aggregate taxable service value exceeds the threshold (currently Rs 20 lakhs or Rs 10 lakhs for special category states, but verify as per latest rules).
* He must **file quarterly service tax returns** and pay service tax accordingly on taxable services rendered within India.
* For export of these services (if provided to clients outside India), service tax will not be applicable (zero-rated).

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### Summary:

| Service Type | Service Tax Applicability | Registration Needed | Refund/Benefit |
| --------------------- | ------------------------- | ------------------------------- | -------------------------- |
| Export of Software | No (zero-rated export) | Recommended | Refund of input tax credit |
| Domestic Web Services | Yes | Mandatory if threshold exceeded | N/A |

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If you want, I can help with:

* Drafting registration forms,
* Preparing refund claims,
* Or clarifying latest GST rules (as GST replaced service tax since July 2017).

Would you like info on GST implications too?

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