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Developing and installing software at client's site.

Arun (A.M. - Accounts) (39 Points)

14 November 2007

Organisation decelops and installs software at client's office, which may be in India as well as abroad.

Whether this transaction attracts service tax, sales tax (VAT) or Works
contract tax?

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2 Replies

CA AYYAPPA (Chartered Accountant) (272 Points)
Replied 14 November 2007

If the service is made in India, the same is chargable to service tax. If the service is made out of India and the money is received in foreign currency and all the export rules has been followed, then its exempt from service tax.

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CA. O.P. Agarwalla (C.A.) (2916 Points)
Replied 15 November 2007

As regards aplicability of VAT is concerned, the basic question is to be decided is- whether one is selling his software or not? If he is not selling the same and developing the same exclusively for the client, I think, it will be out of the purview of VAT.