New Budget regarding Excise tax on packaged software

This query is : Resolved

Guest

Guest (Querist)

13 July 2009 hi can any one clarify to me that, with the withdral of 8% excise tax on packaged software in the recent budget, do I now need to pay service tax on such import of software from outside india?

what do I charge if I resale this software in India VAT or service tax?

CA.Hanumantha Reddy

CA.Hanumantha Reddy (Expert)
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14 July 2009 Packaged software is not exempt from excise duty but only the portion of the value which represents the consideration paid or payable for transfer of right to use such goods. Provided further that the transfer of right to use shall be for commercial exploitation.

Guest

Guest (Querist)

14 July 2009 hi Thanks for your reply.

can you please explain with an example, how to calculate the excise and service compoment.

Regards

Amit

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CA.Hanumantha Reddy

CA.Hanumantha Reddy (Expert)
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14 July 2009 In this case the both transactions are diffr.Packaged software is liable for excise duty on the value which is arrived by the cost plus margins. Suppose if you transfer the packaged softer as IPR (Intellectual Property Right). In this case there is no service tax nothing but as your selling goods. However if you develop the packaged software and transfer the right to use or make copies thereof, in such a cases the service tax is attracted in this case the ownership (i.e. IPR) is within the control of your domino.

Hope the above clarifies you.

Guest

Guest (Querist)

15 July 2009 Thanks for the detailed explaination.

I want to clarify few more points.

I am software reseller of packaged software in India.the software is imported from Europe in form of CD.

Untill now I was paying 8% CVD and charging 4% VAT on my selling price.

Does this new change in exemption affect these taxes?

so I now need to register under servie tax and pay service tax instead of 8 % CVD?

If yes, what do I charge my customer locally, VAT or Service tax or Both?

Rajesh Kumar

Rajesh Kumar (Expert)
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19 July 2009 You are a reseller of goods. You dont need any registration under Excise or Service Tax.
If however, you want to pass on cenvat credit of CVD & SAD, you need to be registered as a dealer of excisable goods.