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Tds on purchase of software with vat

AS 1555 views 1 replies

WE HAVE PURCHASE A SOFTWARE LICENCE AMOUNTING RS.10 THOUSAND PARTY CHARGES ONLY VAT

SUGGEST WE HAVE TO DEDUCT TDS ON BILL OR NOT?
 

From

Xpress Computers Ltd

Prashant T

Accountant

Replies (1)

 

 
If you buy a packed software from the shop there is no service tax and no TDS on those. However, if you are asking someone to develop the software for you or you buy the additional licences or get it customised for you and pay for licences, there is service tax as well as TDS.
 
Therefore, if a company like HP wants to get Windows OS for say 10,000 computers it will buy a customised OEM version from MS and it can istall the same on 10,000 HP computers. Service Tax, VAT and TDS are applicable. When HP sells the computer to you through the shop, it is able to set off VAT 2 VAT, Service Tax to CENVAT as Input. However, when you purchase the PC with software bundled in, you do not have to deduct TDS.
 


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