Tax on software development

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Danish (Querist)
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16 February 2016 How sale of software developed for specific foreign client is taxable in excuse ,custom,income tax,vat etc

CA CMA CS Ram Pavan Kumar Melam

CA CMA CS Ram Pavan Kumar Melam (Expert)
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17 February 2016 It depends on how sell your software to the customer. If you sell as a product, it attracts excise and VAT. If you sell as a service it attracts service tax. In case of export of service, service tax not attracts.

CA CMA CS Ram Pavan Kumar Melam

CA CMA CS Ram Pavan Kumar Melam (Expert)
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17 February 2016 Refer the below cases:
TCS vs. State of Andhra Pradesh [2005]
Infosys Technology Ltd Vs. CCT [ Madras High Court ]
Transforming blank CD into software loaded disc is ‘manufacture’. CIT v. Oracle Software India Ltd 2010 ELT 161 [SC].
Sasken Communication Technology Ltd v. Jt.CCT [ 2011] 33 STT 507

CA CMA CS Ram Pavan Kumar Melam

CA CMA CS Ram Pavan Kumar Melam (Expert)
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17 February 2016 Software is excisable goods
Information technology software ( branded as well as tailor made ) is excisable goods under the heading 8523 80 20 and tariff rate of duty is 12%. However, all software except canned software [i.e. the software which can be sold off the shelf ] , is exempt under Sl. no. 27 of Notification no. 6/2006- CE dated 1.3.2006.

Custom duty on Software
ITS fall under the heading 8523 80 20 of custom tariff and import of software [ branded or tailor made ] is not subject to custom duty. However , the excise duty is payable on branded ( packaged or canned ) software. Hence, CVD will be payable if package or canned software is imported.

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