Whizkid (student) (640 Points)
03 January 2010Can anyone tell me some valid grounds for charging VAT & Service tax for supply of software license on transfer of right to use basis to the buyer. Currently I have observed company are billing both the vat and service tax to their customer...!?
Pl let me know the reason for such taxation
There is absolutely no valid ground for charging both...
It is a conflicting issue between central authorities and state authorities. There is not much clarity on it, tats y this double taxation is going on... Anyway read this : If u hv nt understood anything, u can ask me again.The issue is arising bcz of classifying into branded and unbranded softwares.. Department clarification says that unbranded or customised softwares are to be treated as service and service tax should be levied theron. On the other side branded softwares r to be treated as goods and VAT be charged theron( TCS vs. state of Andhra pradesh).
So if we assume that it is unbranded software, it will be subjected to ST. Also as per notification 12/2003-ST,dated 20/06/2003 ..permits deduction of value of material sold from the value of taxable service to get ST liability. Now wen state Govt. treats it as goods for unbranded software, ST liability will not arise as per the above notification... How??? suppose unbranded software charges Rs 1lakh, it can be deducted by the same amount as deduction fr value of material sold as per notification no12/2003-ST,dated 20/06/2003. Hence, there will be no ST liablity bcz value of taxable service will become nil acrdng to the above notification. Only VAt will be attracted..
Hope u got it,, To conclude double taxation cant happen if there is clarity of the provisions among authorities...
GSTR 9 and 9C for FY 23-24 as amended by Notification 12/2024 dated 10th July 2024(with recording)
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