A client is based in Mumbai and imports Readymade Software from USA. They are charged CVD & Octroi. They sell these readymade software in India and charge VAT @ 4% (for local as well as outside Mumbai) to clients. To some buyers, they offer installation of the software FREE.
I wish to know:
- Are they liable to charge Service Tax from the customers here, although the software is readymade ? Also, if installationn is considered as service, even though it is offered FREE ? Are they still liable to charge Service Tax and if so, then at what rate ? If they charge Service Tax, then are their customers also liable to cut TDS from their payment ? And again, are they (importers) too liable to cut TDS from the supplier's payment made against import purchases ?
As per my knowledge, on sale of 'Tally', a readymade accounting software there is no 'Service Tax' charged and they also offer training, installation when you buy the software.
Waiting for expert opinions.
Best regards,
Prakash
CAclubindia
