Service tax on Software Devlopment

i) Service tax should not be applicable on computer software and IT services industry/professionals. ii) Payment towards licence fee for all kinds of computer software should be exempted from withholding tax through incorporation of suitable amendments in the 'explanation' of Section 9 of the Income Tax Act. In other words, no withholding tax need be deducted while making payment towards licence fees of computer software.

Software development is exempt from service tax under the provisions of consulting engineer service.