{"id":771,"date":"2015-12-17T10:21:24","date_gmt":"2015-12-17T04:51:24","guid":{"rendered":"http:\/\/carajput.com\/blog\/?p=771"},"modified":"2021-12-16T18:15:58","modified_gmt":"2021-12-16T12:45:58","slug":"vat-service-tax-taxability-of-software-related-matter-overview","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/vat-service-tax-taxability-of-software-related-matter-overview\/","title":{"rendered":"vat &#038; service tax &#8211; taxability of software"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69e735f0c803e\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69e735f0c803e\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/vat-service-tax-taxability-of-software-related-matter-overview\/#VAT_SERVICE_TAX_%E2%80%93_TAX-ABILITY_OF_SOFTWARE_RELATED_MATTER_OVERVIEW\" title=\"VAT &amp; SERVICE TAX &#8211; TAX-ABILITY OF SOFTWARE &amp; RELATED MATTER OVERVIEW\">VAT &amp; SERVICE TAX &#8211; TAX-ABILITY OF SOFTWARE &amp; RELATED MATTER OVERVIEW<\/a><ul class='ez-toc-list-level-4'><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4'><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/vat-service-tax-taxability-of-software-related-matter-overview\/#New_TDS_deduction_No_cash_transactions_exceeding_1_Crore_-Section_194N\" title=\"New TDS deduction No cash transactions exceeding 1 Crore -Section 194N\">New TDS deduction No cash transactions exceeding 1 Crore -Section 194N<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/vat-service-tax-taxability-of-software-related-matter-overview\/#Extention_of_TDSTCS_statement_filing_Date\" title=\"Extention of TDS\/TCS statement filing Date\">Extention of TDS\/TCS statement filing Date<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/vat-service-tax-taxability-of-software-related-matter-overview\/#TDS_payment_to_resident_contractors\" title=\"TDS payment to resident contractors\">TDS payment to resident contractors<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p><a href=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2016\/01\/6.png\" rel=\"attachment wp-att-1474\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-1474\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2016\/01\/6-300x183.png\" alt=\"6\" width=\"548\" height=\"334\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2016\/01\/6-300x183.png 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2016\/01\/6-768x468.png 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2016\/01\/6.png 854w\" sizes=\"(max-width: 548px) 100vw, 548px\" \/><\/a><\/p>\n<h2 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"VAT_SERVICE_TAX_%E2%80%93_TAX-ABILITY_OF_SOFTWARE_RELATED_MATTER_OVERVIEW\"><\/span><span style=\"color: #000080;\">VAT &amp; SERVICE TAX &#8211; <span style=\"color: #0000ee;\"><u>TAX-ABILITY<\/u><\/span> OF SOFTWARE &amp; RELATED MATTER OVERVIEW<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>&nbsp;<\/p>\n<ul style=\"text-align: justify;\">\n<li><span style=\"color: #33cccc;\"><strong>SOFTWARE<\/strong>\u2013<\/span> To be treated status quo with implications in case of software.<\/li>\n<\/ul>\n<ul style=\"text-align: justify;\">\n<li><span style=\"color: #33cccc;\"><strong>CLOUD SHARING<\/strong>: &#8211;<\/span> Liable to Service tax<\/li>\n<\/ul>\n<ul style=\"text-align: justify;\">\n<li><span style=\"color: #33cccc;\"><strong>ONLINE DATABASE SHARING<\/strong>: &#8211;<\/span> Liable to Service tax<\/li>\n<\/ul>\n<ul style=\"text-align: justify;\">\n<li><span style=\"color: #33cccc;\"><strong>VALUE ADDED SERVICES<\/strong><strong>: \u2013 <\/strong><\/span>Liable to Service tax like subscription for pro-chat, premium services etc. If charges for transfer the same shall be liable to VAT.<\/li>\n<\/ul>\n<ul style=\"text-align: justify;\">\n<li><span style=\"color: #33cccc;\"><strong>AMC CONTRACT<\/strong><strong>\u2013<\/strong><\/span> Discussed separately under\u00a0clause \u2018H\u2019.<\/li>\n<\/ul>\n<ul style=\"text-align: justify;\">\n<li><span style=\"color: #33cccc;\"><strong>SALE OF LICENSE<\/strong>\u2013<\/span> 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.<\/li>\n<\/ul>\n<ul style=\"text-align: justify;\">\n<li><span style=\"color: #33cccc;\"><strong>ONSITE DEVELOPMENT\u00a0OF SOFTWARE<\/strong> \u2013<\/span> Liable to Service Tax<\/li>\n<\/ul>\n<ul style=\"text-align: justify;\">\n<li><span style=\"color: #33cccc;\"><strong>ADVICE, CONSULTANCY AND ASSISTANCE\u00a0ON MATTERS RELATING TO INFORMATION TECHNOLOGY SOFTWARE<\/strong> \u2013<\/span> Liable to Service tax<\/li>\n<\/ul>\n<ul style=\"text-align: justify;\">\n<li>Where\u00a0client <span style=\"color: #993300;\"><strong><span style=\"color: #33cccc;\">SPECIFIC SOFTWARE IS DEVELOPED<\/span>\u00a0<\/strong><\/span>for the client in such a way that the intellectual property 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. 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)<\/li>\n<\/ul>\n<ul style=\"text-align: justify;\">\n<li><span style=\"color: #33cccc;\"><strong>CUSTOMISED (BESPOKE) SOFTWARE DEVELOPED AND IMPLEMENTED<\/strong><strong>:-<\/strong><\/span> Liable to both Sales tax and Service tax.\u00a0 In this context, one important ruling can be discussed here. 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] 174 (ECJ)<\/li>\n<li>wherein 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.<\/li>\n<\/ul>\n<p>More read:<\/p>\n<ul>\n<li>\n<h4><span class=\"ez-toc-section\" id=\"New_TDS_deduction_No_cash_transactions_exceeding_1_Crore_-Section_194N\"><\/span><a href=\"https:\/\/www.caindelhiindia.com\/blog\/apply-online-nil-lower-tds-deduction-certificate-form-13\/\">New TDS deduction No cash transactions exceeding 1 Crore -Section 194N<\/a><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/li>\n<li>\n<h4><span class=\"ez-toc-section\" id=\"Extention_of_TDSTCS_statement_filing_Date\"><\/span><a href=\"https:\/\/carajput.com\/learn\/nsdl-extension-of-qtr-tdstcs-statement-filing-dates-for-4-quarter-of-fy-201920-until-30-june.html\">Extention of TDS\/TCS statement filing Date<\/a><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/li>\n<li>\n<h4><span class=\"ez-toc-section\" id=\"TDS_payment_to_resident_contractors\"><\/span><a href=\"https:\/\/carajput.com\/blog\/basic-understanding-on-tds-on-payments-to-resident-contractors-professionals-section-194m-form-26qd-and-form-16d\/\">TDS payment to resident contractors<\/a><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/li>\n<\/ul>\n<ul style=\"text-align: justify;\">\n<li><span style=\"color: #33cccc;\"><strong>MANPOWER SUPPLY<\/strong><strong>: &#8211;<\/strong><\/span> Liable to Service tax<\/li>\n<\/ul>\n<p style=\"text-align: justify;\">For query or help, contact: <a href=\"mailto:singh@carajput.com\">singh@carajput.com<\/a>\u00a0or call at 9555555480.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>VAT &amp; SERVICE TAX &#8211; TAX-ABILITY OF SOFTWARE &amp; RELATED MATTER OVERVIEW &nbsp; SOFTWARE\u2013 To be treated status quo with implications in case of software. CLOUD SHARING: &#8211; Liable to Service tax ONLINE DATABASE SHARING: &#8211; Liable to Service tax VALUE ADDED SERVICES: \u2013 Liable to Service tax like subscription for pro-chat, premium services etc. &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[172],"tags":[3192,3196,3195,3197,3194,3912,3913],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/771"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=771"}],"version-history":[{"count":5,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/771\/revisions"}],"predecessor-version":[{"id":19974,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/771\/revisions\/19974"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=771"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=771"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=771"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}