Vat applicability
This query is : Resolved
16 July 2012
Hi,
Please suggest that VAT is applicable on the software development for mobile applications.
Thanks
Parminder
Please suggest that VAT is applicable on the software development for mobile applications.
Thanks
Parminder
16 July 2012
Which state the query relates?
17 July 2012
This is for Andhra Pradesh
02 August 2025
For **Andhra Pradesh**, regarding VAT applicability on **software development for mobile applications**:
* **VAT is generally not applicable** on software development services because **VAT applies only to sale of goods**, not services.
* Software development is treated as a **service** under the service tax laws.
* Therefore, **Service Tax (now GST) applies**, not VAT.
* However, if the software is sold as a **packaged product** (like a CD or physical media), then VAT might apply on the sale of that physical product.
* But pure **software development, customization, or delivery electronically is considered a service** and falls under service tax/GST.
---
**Summary:**
| Nature | VAT Applicability | Service Tax Applicability |
| --------------------------------- | ----------------- | ------------------------- |
| Software development (service) | No | Yes |
| Sale of physical software package | Yes | Yes |
---
So, for your mobile app development, **VAT does not apply** in Andhra Pradesh — service tax or now GST would be the relevant tax.
If you want, I can help you with the latest GST provisions for software services as well!
* **VAT is generally not applicable** on software development services because **VAT applies only to sale of goods**, not services.
* Software development is treated as a **service** under the service tax laws.
* Therefore, **Service Tax (now GST) applies**, not VAT.
* However, if the software is sold as a **packaged product** (like a CD or physical media), then VAT might apply on the sale of that physical product.
* But pure **software development, customization, or delivery electronically is considered a service** and falls under service tax/GST.
---
**Summary:**
| Nature | VAT Applicability | Service Tax Applicability |
| --------------------------------- | ----------------- | ------------------------- |
| Software development (service) | No | Yes |
| Sale of physical software package | Yes | Yes |
---
So, for your mobile app development, **VAT does not apply** in Andhra Pradesh — service tax or now GST would be the relevant tax.
If you want, I can help you with the latest GST provisions for software services as well!
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