Sale of ip

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

01 July 2013 We are a company in Bangalore, which is into creation of IP in the field of software technology. One of our IPs has come to a stage where we are in talks with companies in India for the sale of the IP.

What I would like to know is :

What are the taxes that are applicable if we sell our IP?
Are we liable for service tax?
Are we liable for sales tax, and if so, at what percentage?

I would appreciate an early reply to my query.

Gopalkrishna Hegde ,CA,DISA

Gopalkrishna Hegde ,CA,DISA (Expert)
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02 July 2013 Hi

I understand that the query is with respect to Intellectual Property , created by your company in terms of software developed.

It depends upon the situation as regards taxability

The issues are
1) whether the IP that has been developed is being sold to other company
or
2) Whether the IP belongs to you and the software is installed in the client system and still you own the software(transfer of right to use the goods).That is client runs the software in his system.

Please clarify

Querist : Anonymous

Querist : Anonymous (Querist)

03 July 2013 The query is with respect to Intellectual Property.

The IP that has been developed is being sold to another company and we would be giving up our rights to the IP.

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Gopalkrishna Hegde ,CA,DISA

Gopalkrishna Hegde ,CA,DISA (Expert)
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10 July 2013 1)One which satisfies the definition of goods would be subject to sales tax

2)‘development, design, programming, customization, adaptation, upgradation, enhancement, implementation of information technology software' is a declared service

3) Sale of pre-packaged or canned software is in the nature of sale of goods

4)‘Transfer of right to use goods' is deemed to be a sale

But there are lot of litigation as regards software is concerned whether it is subject to sales tax or service tax. So we need to understand complete facts before the stand can be taken.