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Software firm is service based or product based

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Mitesh Patel

81 Points Posted on 25 May 2022

hello everyone

i want to start software firm based on proprietorship
they can build software for customer and also get yearly amc fees for software services

my firm falls in product company or service based company in gst ?

software company not build physical product they falls in manufacturing of product ?

Replies (3)

Quick Summary

This discussion clarifies whether a software firm that builds custom software for clients and earns annual maintenance fees should be classified as a product-based or service-based company for GST purposes. The consensus is that if the primary activity involves developing software and providing ongoing services like AMC, it's considered a service-based company, even if third-party code is incorporated into the solution.

Unnati Choubey

28 Points Posted on 25 May 2022

Software company main activity is to build software and provide amc so it will come under service based company

Dhruv Parekh

24 Points Posted on 27 March 2023

What if you are buying software and sell this along with implementing software?

Ashok

Tax Payer

45 Points Posted on 29 March 2023

If you buy software / SDK / third party code to use it as part of your software / solution you are implementing for the client, it is still a services company.

Understand how majority of the revenue is derived to answer your question yourself.