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Online purchase of Software.

Jeevesh Mehta (Advocate- Corporate Commercial & Indirect Tax Advisory) (861 Points)

26 May 2009

Query--

Suppose -

I purchase softwares from the websites of foreign based compnaies by paying through my credit card. ( No understanding or agreement between me and the software compnay) ---

I use such softwares in developing new software to be sold to my customers.

Question: purchase of software online would be called as import of service?

regards

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3 Replies

Sumit Jain (CA) (4760 Points)
Replied 26 May 2009

yes it shuld be considered as import of services

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Jeevesh Mehta (Advocate- Corporate Commercial & Indirect Tax Advisory) (861 Points)
Replied 26 May 2009

Dear Sumit,

In that case wat would be the basis of levy of tax.. there is no invoice . I have only the payment reciepts.

Should not it be a simple sale transaction?

Madhukar N Hiregange (Chartered Accountant) (39034 Points)
Replied 27 May 2009

In my view the purchase of software thru the net is not a service though the defintion on ITSS covers the same. The transaction is one of buy/ sell which is subject matter of VAT inot whose jurisdiction Service Tax should not have entered. SC will quash the same in due course in my view.