VAT and Service tax both on software

Queries 1983 views 6 replies

a person is charging VAT and service tax both on software whether he can.

Replies (6)

vat is chargable on packaged software, while service tax is on others, 

he may have been under contract for service and maintanance of software, 

Works contract is a common area where vat and service tax both are applicable.

But whther he can charge VAT and service tax in one bill

i will be very thankful if you can provide me the case law on the same.

 

Yes you can charge both taxes but you have to bifurcate same in invoice sorry I don’t have any case law on same..

what we have to byfircate the service and good or VAt or service tax

 

vat charged on packed software and service tax charged on other software but my point of view raise two invoice on for vat  and second for service tax its better to maintain separate records of vat and service tax…..

from 2008, software licence is catagorized as service, 

if you have asked the software seller to install the software for you , then they are right to charge the service tax, but if u have bought the software in packed condition then their invoice would be alike .....

for software of 1000/- value

Licence ( Key) fees 500 *10.3% = 51.50 service tax

packaged software 500*4% = 20/- (VAT)

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however when u ask the person to install the software and don't want to claim the warantee from the company but from vendor, then its service part of the dealer to provide u installation support/ after sales support and warantee cover, ( may be replenished by the principal but not the taxes) so he charge the service tax on whole the pack and vat also, as the buyer is not ready to book the payment in TWO heads and issue ONE order including all as it happens in "comprehensive AMC"

 


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