Service Tax on Web Development & Hosting Services

web developement and hosting not taxable as of now.

It can be argued that it falls in the category of Information Technology which is exempted from Business Auxiliary services.Software developement is exempt from service tax

However, software maintenance is taxable under repairs services wef 7.10.2005 (Dept says taxable from 9.7.2004)

For sales tax, TCS case is relevant. Anyway, your actvity will not be taxable for sales tax.