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Querist : Anonymous

Querist : Anonymous (Querist)

25 December 2013 If I import a licensed software from a company who has no permanent representation in India, and then further sell it as is as a distributor, if applicable, what will be the TDS rates?

Guest

Guest (Expert)

25 December 2013 Read section 115 A..Treated as a Royality and TDS is deducted at 10 percent.

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Querist : Anonymous

Querist : Anonymous (Querist)

25 December 2013 If I may also ask - I may not be able to deduct TDS of the foreign vendor.

Some of my retail customers are individuals who will not cut the TDS. What happens in this scenario?

Guest

Guest (Expert)

25 December 2013 Show the amount as gross amount and pay the amount of TDS from your own pocket now.
For Example if u have paid 100000Rs to a foreigner Show it as 100000/90% Rs111111 as royalty and pay TDS of Rs 11,111.

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Querist : Anonymous

Querist : Anonymous (Querist)

03 January 2014 Thanks for all the prompt replies.

One more question with respect to the same:
The software is not modified by me - Do I apply only the 5%VAT or also service tax also on the license-boxed software?

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)
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27 July 2025 Regarding your question about tax treatment on the sale of imported licensed software (unmodified) as a distributor in India:

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### VAT and Service Tax applicability:

1. **VAT (Value Added Tax) / GST:**

* Sale of software in a physical form (like boxed software on CDs/DVDs) is generally treated as a **sale of goods**.
* Hence, **VAT (or GST in the post-GST regime)** applies on the sale price.
* The VAT rate can vary by state but often is around **5%** on packaged software.

2. **Service Tax (Now GST):**

* Service tax is generally **not applicable** on the sale of goods.
* However, if you provide any services along with software (like installation, customization, or support), those services attract service tax/GST.
* Since you mentioned software is sold **as-is** without modification or additional service, **service tax is not applicable** on the sale.

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### Summary:

* On the sale of unmodified licensed software in boxed form: **only VAT/GST is applicable** (typically around 5%).
* No service tax on the software license sale itself.
* If any service is provided (like technical support), then service tax/GST applies on that component.

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If you want, I can also help with more details on input credits and invoice formats for this scenario. Would you like that?

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