Whether TDS is deductible on packedged software purchased?

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This query is : Resolved

Vishnu Maheshwari (Querist)

28 November 2009 Please let me know whether I have to deduct TDS on software purchased, on which both CST and Service Tax both are applicable? Whether it would be treated as goods or taxable service?

Type of Software purchased is: "For Recruitment Services".

Ram Avtar Singh

Ram Avtar Singh (Expert)

28 November 2009 TDS applicable on sale of software

Sunil

Sunil (Expert)

28 November 2009 TDS is applicable u/s 194J since 2008 when service tax was introduced on the ITSS services for softwares. It includes packaged softwares also. In 2009 they have only issued clarification for Cenvat and Custom. there is no doubt that sale of packaged software is an ITSS service and therefore you have to deduct tax u/s 194J. You also refer to the ISODA website. This is the association of those dealers who sell packaged software like MS Office and Adobe etc. They are trying to lobby with the government as it is too much for them to lose 10% TDS from their cash flow when what they make is 2-3% from the software companies. Over and above that they have to pay VAT and Service Tax also. There is no small service provider exemption as the service they are selling is a branded service.

Murtaza I Bhagat

Murtaza I Bhagat (Expert)

28 November 2009 ?

Sunil

Sunil (Expert)

29 November 2009 If you see this link you may learn more about the issue but there is no clarity. Confusion prevails.
https://www.aboutus.org/Isoda.in
Therefore, as a precaution it is better to deduct TDS U/s 194 J or there is possibility that 60% depreciation may be disallowed.

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