{"id":441,"date":"2015-09-25T12:29:08","date_gmt":"2015-09-25T06:59:08","guid":{"rendered":"http:\/\/carajput.com\/blog\/?p=441"},"modified":"2021-11-17T12:06:44","modified_gmt":"2021-11-17T06:36:44","slug":"vat-service-taxliableon-software-etc","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/vat-service-taxliableon-software-etc\/","title":{"rendered":"VAT & SERVICE TAXLIABLEON SOFTWARE ETC"},"content":{"rendered":"

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\"www.carajput.com;<\/a><\/p>\n

VAT & SERVICE TAX LIABLE ON SOFTWARE ETC<\/strong><\/span><\/h2>\n
    \n
  1. Onsite Development of Software<\/strong> \u2013 Liable to Service Tax<\/a>.<\/span><\/li>\n
  2. Advice, consultancy and assistance\u00a0on matters relating to information technology software<\/strong> \u2013 Liable to Service tax.<\/span><\/li>\n
  3. Where\u00a0client specific software is developed\u00a0<\/strong>for the client in such a way that the intellectual property<\/a> developed belongs to the client\/customer\u00a0(just like a job-work)\u00a0from the very beginning without the creator retaining any ownership rights over the same, the arrangement would be one of service and not sale of goods. <\/span><\/li>\n
  4. The same has been confirmed under\u00a0Sasken Communication Technologies Ltd Vs Joint Commissioner of Commercial Taxes,Bangalore (2011 (4) TMI 566 \u2013 Karnataka High Court).<\/span><\/li>\n
  5. AMC Contract\u00a0\u2013<\/strong> Discussed separately under\u00a0clause \u2018H\u2019.<\/span><\/li>\n
  6. Sale of License<\/strong>\u2013 Liable to Service tax if no transfer of right to use while liable for sales tax if transfer for right to use under deemed sale concept. Largely would depend on case to case basis.<\/span><\/li>\n
  7. Customised (Bespoke) Software Developed and Implemented:-<\/strong> Liable to both Sales tax and Service tax.\u00a0 In this context, one important ruling can be discussed here.<\/span><\/li>\n
  8. The ruling is by foreign court i.e. in case of\u00a0LevobVerzekeringen BV and OV Bank NV v. Secretary of State for Finance, Netherlands [2012] 22 taxmann.com 174 (ECJ)\u00a0\u00a0wherein it was held that Supply of basic software along with subsequent customisation thereof to meet requirements of customer and training to his employees under a single contract is a single indivisible supply of service and whole of the receipts are liable to service tax on Dominant nature test.<\/span><\/li>\n
  9. Manpower Supply\u00a0:-<\/strong> Liable to Service tax.<\/span><\/li>\n<\/ol>\n

    Software<\/strong>\u2013 To be treated status quo with implications in case of software.<\/span><\/p>\n

      \n
    1. Cloud Sharing<\/strong>:- Liable to Service tax.<\/span><\/li>\n
    2. Online database Sharing<\/strong>:- Liable to Service tax.<\/span><\/li>\n
    3. Value added services: \u2013 <\/strong>Liable to Service tax like subscription for pro-chat, premium services etc. If charges for transfer the same shall be liable to VAT.<\/span><\/li>\n<\/ol>\n

      The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Hope the information will assist you in your Professional\u00a0endeavors. For query or help, contact:\u00a0singh@carajput.com<\/a>\u00a0or call at 9555555480.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

      VAT & SERVICE TAX LIABLE ON SOFTWARE ETC Onsite Development of Software \u2013 Liable to Service Tax. Advice, consultancy and assistance\u00a0on matters relating to information technology software \u2013 Liable to Service tax. Where\u00a0client specific software is developed\u00a0for the client in such a way that the intellectual property developed belongs to the client\/customer\u00a0(just like a job-work)\u00a0from …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[172,4],"tags":[3192,3196,3195,3197,3191,3194,3193,3198],"class_list":["post-441","post","type-post","status-publish","format-standard","hentry","category-gst","category-indirect-tax","tag-amc-contract","tag-cloud-sharing","tag-manpower-supply","tag-online-database-sharing","tag-onsite-development-of-software","tag-sale-of-license","tag-secretary-of-state-for-finance","tag-value-added-services"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t