Vat and service tax applicability
This query is : Resolved
08 April 2013
Hi Experts,
Had a query regarding on applicability of Service Tax and VAT on software license fees and yearly up gradation of the same. Yearly up gradation means the up gradation of software.
1. What rate of Service tax and VAT will be applicable of License fees and next year up gradation ?
2. will be VAT computed on up gradation of software ?
Thanks
Sachin
Had a query regarding on applicability of Service Tax and VAT on software license fees and yearly up gradation of the same. Yearly up gradation means the up gradation of software.
1. What rate of Service tax and VAT will be applicable of License fees and next year up gradation ?
2. will be VAT computed on up gradation of software ?
Thanks
Sachin
08 April 2013
Yearly upgradation is nothing but "providing right to use for specified period"
In case of software "right to use" is prolonged debatable matter. State department want to levy tax treating it as a "transfer of right to use" on other hand service tax department saying it is not a "transfer of right to use as there is lots of restricition on right to use"
Hence as per industrial practise everybody is charging vat and service tax both on software sale. Full rate would be chargeable (i.e.12.36% for s.tax and VAT as per governing state law)
In case of software "right to use" is prolonged debatable matter. State department want to levy tax treating it as a "transfer of right to use" on other hand service tax department saying it is not a "transfer of right to use as there is lots of restricition on right to use"
Hence as per industrial practise everybody is charging vat and service tax both on software sale. Full rate would be chargeable (i.e.12.36% for s.tax and VAT as per governing state law)
Message likes :
2 times
18 June 2014
Refer to White paper on Service Tax & VAT on Software and Software Licensing
https://www.caclubindia.com/articles/service-tax-and-vat-jargon-on-softwares-and-software-licensing-simplified--20808.asp#.U6Eoi3bcD5s
https://www.caclubindia.com/articles/service-tax-and-vat-jargon-on-softwares-and-software-licensing-simplified--20808.asp#.U6Eoi3bcD5s
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