TDS on payment

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Anoop Nair (Querist)
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03 February 2009 Our company is purchasing some software lisences and installing the same to our customer site as part of implimentation process of their project. The products are IVR software & microsoft softwares.
My questions are
1. Whether the sale of these software product attracts service tax when we are billing the same to the customer??
2. Whether the customer can deduct TDS when they are doing the advance payment against this sale?

CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)
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03 February 2009 Off the shelf i.e non-customized softwares are goods liable for VAT.
If VAT is levied treating the transaction as outright sale no leviability of TDS.
If otherwise it is taken as service contract TDS on Contractors u/s 194C is applicable.

Anoop Nair

Anoop Nair (Querist)
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05 February 2009 We are intalling the software in our client site for their use.. Is Service tax is applicable for that? Is the installation of the s/w comes under customization??

CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)
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10 February 2009 Sir,
if u are purchasing software from one party and selling it to another party and doing the implementation wotk then VAT will be levied.
if otherwise the party is purchasing the software from third party and you are only doing the implementation of the software at client place, then service tax is leviable and liable for TDS.

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