Software issues

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S.Siju Gemin (Querist)
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31 August 2009 Dear Sir,
I would like to know the applicability of Service tax OR Sales Tax for the below Software issues:-

1) We develop software for the Hand Held Computers and would supply customised software to the customer as per their requirement. When we bill for this customised software development only, should we charge Sales tax Or Service Tax?

2) What happens when customer wants to pay on the basis of man hours spent by our employee at his workplace for development of software? Should we charge Sales tax or Service Tax?

3) Some of our customer are ready to take Annual maintenance contract purely for Software. Should such maintenance be charged to Sales tax or Service Tax

-Siju

CA CS CIMA Prakash Somani

CA CS CIMA Prakash Somani (Expert)
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31 August 2009 1. Service tax
2. Same
3. Service tax

CA CHINTAN AJMERA

CA CHINTAN AJMERA (Expert)
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31 August 2009 In all Service tax

Vijay Chitte

Vijay Chitte (Expert)
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01 September 2009 If it is agreement for sale then only sales tax is applicable, if it is agreement for service contract then only service tax will be applicable.

S.Siju Gemin

S.Siju Gemin (Querist)
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01 September 2009 Dear Sir,

There is no agreement entered with our customers

Also note that we are manufacturers of Machines which runs on software.

Kindly note that the above queries which I have raised are:

"I would like to know the applicability of Service tax OR Sales Tax for the below Software issues:-

1) We develop software for the Hand Held Computers and would supply customised software to the customer as per their requirement. When we bill for this customised software development only, should we charge Sales tax Or Service Tax?

2) What happens when customer wants to pay on the basis of man hours spent by our employee at his workplace for development of software? Should we charge Sales tax or Service Tax?

3) Some of our customer are ready to take Annual maintenance contract purely for Software. Should such maintenance be charged to Sales tax or Service Tax"

Kindly guide me as Iam caught between Service tax and Sales tax

-Siju

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