Reg service tax applicability

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Shikha Bajaj (Querist)
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20 March 2012 Hello,

Is service tax applicable on cloud computing & application hosting services like quick book hosting services?

If yes, under which category is it covered?

Thanks

Shikha Bajaj

Shikha Bajaj (Querist)
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22 March 2012 Experts, Please help.

Please check whether we can cover the above services under "business support services" or not?

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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20 July 2025 Yes, service tax was applicable on cloud computing and application hosting services, including services like QuickBooks hosting, prior to the introduction of GST in July 2017.

✅ Under the Pre-GST Regime (Service Tax)
Cloud computing and hosting services are considered as taxable services under the broad scope of Information Technology (IT) services, and later, under Business Support Services or Online Information and Database Access or Retrieval Services (OIDAR), depending on how the service is structured.

📌 Relevant Categories (Pre-GST):
1. Business Support Services (BSS) – Section 65(104c)

These include:

Infrastructure support services
Office-related support services
Technical and operational assistance
If you were providing application hosting or infrastructure (like server space), you could be covered here.
2. Online Information and Database Access or Retrieval Services (OIDAR) – Section 65(75)

These include:

Providing data or information retrievable from a computer network
Online storage
Cloud-based software services
If your client accesses the application via the internet and uses data online, this would apply.
3. Information Technology Software Services – Section 65(105)(zzzze)

Development, design, programming, customization, or support of IT software.
Applicable if you’re involved in maintaining or customizing hosted applications.
📄 Service Tax Liability Timeline:
Before 01 July 2012: Specific taxable service categories applied (as above).
After 01 July 2012: Negative List regime introduced – all services taxable unless specifically exempt.
Hosting and cloud computing were taxable, as they were not in the negative list.
💡 Conclusion:
Yes, service tax was applicable on cloud computing and application hosting services, and it typically fell under:

OIDAR or
Business Support Services, depending on how the service was structured and delivered.
If you're looking at post-2017, the Goods and Services Tax (GST) now applies under SAC Code 998313 or 998314 (Hosting and IT infrastructure provisioning services).

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