Taxation on Sale of software online

695 views 3 replies

CA. Naveen Bhat

175 Points Joined January 2008

I will like to understand the taxation issue on sale of software. A UK based company is selling software online to a Company in India. The Indian company has to pay the total amount to a Related entity in India. Now as the software will be sold online i.e. the Indian Company has to download the software directly from the Internet, in such cases whether VAT is applicable. If applicable which state will have the right to tax such transaction. The state where the Indian Company is located or where the company who will collect the payment is located. Also whether Service tax is also applicable on such software. The software will be "standard software" and can be customise to local needs.

Replies (3)

MAHENDRA KUMAR BAGRECHA

FCA

1402 Points Joined March 2009

Hi Naveen,

I also want to know the answer, but first of all, Indian company is purchasing the software, there will not be any question of VAT....? Please correct me if i am wrong. As you have posted this querry one year back, if you have got answer, let me also know.

Thanks.. Mahendra

Mahesh

CA Final

132 Points Joined April 2009

Mahesh

CA Final

132 Points Joined April 2009

Originally posted by : Mahesh
	Hi Sir, As per my understanding, on import of Software we have to intimate to custom department & On Payment we have to pay service tax ,service tax will be refund back, Vat is not applicable on import of software, but After u import u sold in india VAT & Service Tax both are Applicable on sale of Software.