Tax applicability - service tax, vat and excise

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Praveen kumar varma (Querist)
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17 April 2014 Dear All

pls advice which type of tax applicable on product.

We have manufacturer of Software but we dont known which tax applicable

Regards
Praveen

Arun Kumar Singh

Arun Kumar Singh (Expert)
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18 April 2014 Excise duty will be applicable on manufacturing of goods and at the time of sale tax tax/VAT will be applicable. If you have providing any service then service tax will be applicable.

Santosh Kalburgi

Santosh Kalburgi (Expert)
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27 April 2014 Excise duty on software: All software, except canned software i.e. software that can be sold off the
shelf, is ‘exempt’ under notification No. 6/2006-CE dated 1-3-2006.

The above mentions that if a software is sold in a CD DVD etc, like McCafe antivirus, lotus, etc then it is manufacture and it attracts excise duty and also attracts VAT/CST during its sale.

If a software is made as per the customer's specification and not sold in packaged in CDs DVD etc, then it does not come under manufacture so no excise duty on it. But since it is a service, the service tax needs to be paid on it and there is no VAT on services.

Regards,
Santosh G Kalburgi
Cost Accountant

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