Software - goods or service?
Software, branded as well as tailor-made, has been held as goods by the Supreme Court. It is also specified as ‘goods’ in both Central Excise and Customs Tariff. Many States are imposing Vat on sale of branded as well as unbranded software. Issue is whether unbranded, i.e., tailor-made
software is also a ‘service’?
In Imagic Creative (P.) Ltd. v. CCT [2008] 12 STT 392 (SC), it has been held that service tax and Vat (sales tax) are mutually exclusive.
Service tax is imposed under entry 97 of List I which is a residual entry. Thus, if a transaction is covered in list II, it cannot get covered in entry 97 of List I. Since sales tax is covered in List II, it is doubtful if service tax can be imposed on a transaction which is entirely getting covered under List II.
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