TDS on purchase of software

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dattatreya Sarma (Querist)

07 May 2010 hi
all please tell me
we are purchased some software
they charged me servicetax as well as vat 4%
the question is
am i deduct tds to them if yes in which sec: pls reply me asap

thanks & regards
Dattatreya

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

07 May 2010 purchase of software not attract TDS,Because of applicability law for purchase of Software ,vendors charging both VAT & ST. but there is no TDS applicable

CA. RAJESH Kr. MAURYA

CA. RAJESH Kr. MAURYA (Expert)

07 May 2010 Dear, as per your query, it comes out that the software was purchased and then installed.

It can be considered under WCT if there is any contract for the work carried out, in that case deduct TDS @ 2% on contract amount (excluding value of goods)

If no contract exists and a simple invoice with separate charges for goods and service is mentioned, just deduct TDS @10% u/s 194J on service charges only.

If total amount with no classication is given, try to distinguish whether major part is sale or service, if sale - No TDS, and Service plays major role, deduct TDS u/s 194J.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)

07 May 2010 AGREE.
ON PURCHASE NO TDS.
ON INSTALLATION CHAREGS DEDUCT TDS U/D 194J AS IT IS TECHNICAL SERVICE.

CA Prashant Gupta

CA Prashant Gupta (Expert)

07 May 2010 on purchase of software treatment is different. on software both service tax and VAT or CST is applicable. Actually it is assumed that there is not only material but services of making software is included. So both service tax and VAt is applicable. You have to deduct TDS on full amount. This is a practical approach. I myself do in my present company and previous company and software seller had no objection for that. So deduct TDS on full amount.

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