Wait D.Joshi,
I would suggest you to go for a consultant in such matter.
You are providing the following services;
1. Creating characters and selling the right to use the same (permanent / temporary);
2. Software development and maintenance;
Sol.
1. If you are working independently and selling the rights permanently, then it is not covered under service tax law as there is no service;
but if you are only giving temporary rights, then it is subject to service tax. If such service recipient is outside India, then no service tax can be levied (Sec.66B of the Act read with Rule 3 of Place of Provision Rules, 2012). It does not matter, if you receive the same in foreign currency or not in such respect. But if you want to claim rebate of cenvat paid for such services provided, then you will have to receive the consideration in Covertible foreign currency (Rule 6A of Service Tax Rules, 1994).
But if you are working as salaried employee, then again it beyond the ambit of service tax, as it is not a service only.
2. Be careful in this one. If you are developing software completely, then the place of service recipient is to be considered, i.e., if it is outside India, then it will not be taxable (Sec.66B read with Rule 3 of Place of Provision Rules, 2012)
But if you are doing some repair or maintenance; then it is covered by Rule 4(a) of Place of Provision Rules, 2012, i.e., the location where such service has taken place shall be considered for taxability. Hence, in your case, you would be doing the same in India, hence such service would be taxable (Sec.66B).
I again request to consult a professional, if your turnover exceeds Rs.10 Lakhs (no tax if below this limit for you vide Notification No.33/2012-ST), as the laws have humungously changed and you might have noted that same by now.
Hope this is suffice...
CAclubindia
