Tds on software based on notification no 21/2012 dtd 130612

Dear All,

Please find the attached circular and give your expert comments'

1. IS this applicable to TDS on Ready to Use Software like Windows 7, Linux etc or only on tailor made Software like modified ERP packages? Does software mean Product or License?
2. Does this mean that wef 01st July 2012, that on very first sale of software or very first transfer of software TDS is applicable? The Circular has mentioned about subsequent Transfer but the wordings are such that first transfer has to be after TDS? And there are citations where no TDS is applicable on Trf of Software, what about that?
3. What if there is no PAN for NON Resident even on first transfer or there is no PE in India of Non Resident? Still TDS U/s 195 to be deducted? If yes at what Rate?
4. So on subsequent sale of Software, Service Tax and VAT both are applicable? But TDS is not to be deducted?

Pl clarify, as this is quite ambiguous to me!