service tax on imports

1904 views 1 replies

we are trading company, we import ready made software as well as customized software.

On customized  software service tax is levied under 65(105)(zzzze)

however ready of the notification dt wef 16/5/08 as below it seems that  service tax is applicable on readymade software also"

"

What is taxable - 65(105)(zzzze)

Any service provided or to be provided to any person, by any other person in relation to information technology software for use in the course, or furtherance, of business or commerce, including,—

(i) development of information technology software,

(ii) study, analysis, design and programming of information technology software,

(iii) adaptation, upgradation, enhancement, implementation and other similar services related to information technology software,

(iv) providing advice, consultancy and assistance on matters related to information technology software, including  conducting  feasibility  studies  on implementation of a system, specifications for a database design, guidance and assistance during the start-up phase of a new system, specifications to secure a database, advice on proprietary information technology software,

(v) acquiring the right to use information technology software for commercial exploitation including right to reproduce , distribute and sell information technology software and right to use software components for the creation of and inclusion in other information technology software products,

(vi) acquiring the right to use   information technology software supplied electronically;

Who is the provider of service

Any person

Who is the receiver of service

Any other person

Meaning of information technology software - 65(53a)

"information technology software" means any representation of instructions, data, sound or image, including source code and object code, recorded in a machine readable form, and capable of being manipulated or providing interactivity to a user, by means of a computer or an automatic data processing machine or any other device or equipment;

"

querry: whether service tax is applicable on import of ready made software ,can you help with the relevant provision on the taxation issue

Replies (1)

Service Tax is payable on both the imports. Important point is how it is imported.

If it is imported in the form of CD, Data Card etc., custom duty is payable and value for the custom duty will include any other payment made for services.

If it is imported through internet, service tax is payable on the gross amount paid to the service provider. 

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