does Software Customisation attracts ST

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vamshi (Querist)
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19 September 2007 does Customisation of software as per the needs of customer falls under the Information Technology services and becomes taxable. If yes under what category.

CMA Gul S

CMA Gul S (Expert)
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19 September 2007 Hi Vamshi,

This should go in this

On-line information, access and retrieval services

Tax on this service was introduced with effect from 16-7-2001. The service is also termed as ‘Computer Network Service’.

As per section 65(105)(zh), any service provided or to be provided to a customer, by any person (earlier, the words were ‘a commercial concern’), in relation to on-line information and database access or retrieval or both in electronic form through computer network, in any manner is a taxable service.

As per section 65(75), “on-line information and database access or retrieval” means providing data or information, retrievable or otherwise, to a customer, in electronic form through a computer network.

As per section 65(30), “computer network” has the meaning assigned to it in section 2(1)(j) of the Information Technology Act, 2000. As per that section, ‘computer network’ means the interconnection of one or more computers through— (i) the use of satellite, terrestrial line or other communication media; and (ii) terminals or a complex consisting of two or more interconnected computers whether or not the interconnection is continuously maintained.

As per section 65(36), “data” has the meaning assigned to it in section 2(1)(o) of the Information Technology Act, 2000. As per that section, ‘data’ means a representation of information, knowledge, facts, concepts or instructions which are being prepared or have been prepared in a formalized manner, and is intended to be processed, is being processed or has been processed in a computer system or computer network, and may be in any form (including computer printouts magnetic or optical storage media, punched cards, punched tapes) or stored internally in the memory of the computer.

As per section 65(39), “electronic form” has the meaning assigned to it in section 2(1)(r) of the Information Technology Act, 2000. As per that section, ‘electronic form’ with reference to information means any information generated, sent, received or stored in media, magnetic, optical, computer memory, micro-film, computer generated micro fiche or similar device.

As per section 65(53), “information” has the meaning assigned to it in section 2(1)(v) of the Information Technology Act, 2000. As per that section, ‘Information’ includes data, text, images, sounds, codes, computer programmes, software and databases or micro film or computer generated micro fiche.