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Works contract on software services

1071 views 1 replies

vinzyy

BDM

31 Points Posted on 20 August 2013

Dear Experts,

Can you please guide me to draft a quotation for supply of ADDITIONAL Software services on locally purchased software and hardware. We wish to purchase some licensed software product and some hardware from Mumbai, India and then do additional software work on this packaged software then sell (both modified software and same hardware) to our client based in Bangalore, India.

1. Will this kind of work come under works contract?

2. What taxes OUR vendor will charge us ? (i.e. excise duty, MVAT, service tax, etc)

3. What taxes shall we charge to OUR client ? (i.e. excise duty, MVAT, service tax, etc)

4. Do we get any input credit ? (i.e. excise duty, MVAT, service tax, etc)

Kindly advise us on the above.

Thanking you !!

Replies (1)

Prabhat Kumar

Advocate & Consultant

1912 Points Posted on 21 August 2013

If while providing the service title of some goods also passes to the recipient of service and if such transfer is leviable of Sale Tax then it may fall within work contract service.In your case the sotware/hardware sold as it is-only VAT is payable.The software you purchased from Mumbai and do some improvement can be taken as input for providing output services,here you can take credit of Excise Duty paid by the original manufacturer and can use it to discharge Service Tax liability.