Saurabh (Article) (36 Points)
10 December 2009Dear Fellows,
A client is selling software made by him for the 1st time and billing under the name of his own newly incorporated company.His billing amount will be arround 8 lakhs,and he is sure that his turnover will not go beyond the basic threshold limit.
I wish to know :
1. Is he liable to charge service tax on this bill
2. On what amount he should charge service tax ,i.e whether he should charge on (basic amount + vat) or just on basic amount..
BeyondConsultants
(CA/CS/LLB(DU))
(184 Points)
Replied 10 December 2009
No service tax till 10 lakh of receipts
But Y he will charge VAT? Whether this software is a customised for particular client or for general use for public at large i.e Package Software like MS Office, Games etc.
If customised VAT will not apply but is Packaged then Service tax is not applicable at all.
Regards
Saurabh
(Article)
(36 Points)
Replied 10 December 2009
sir,
he is selling software..
dont u think he shud charge vat..?
BeyondConsultants
(CA/CS/LLB(DU))
(184 Points)
Replied 10 December 2009
selling is just one aspect. First u need to analyse what he is developing - cutomised or packaged software?
Saurabh
(Article)
(36 Points)
Replied 10 December 2009
okay sir
if customised den would he charge VAT..?
BeyondConsultants
(CA/CS/LLB(DU))
(184 Points)
Replied 10 December 2009
no vat on customised software
NARENDER PAWAR
(CA final Student)
(337 Points)
Replied 11 December 2009
u have no need to charge service tax.
u charge vat from u customer
Madhukar N Hiregange
(Chartered Accountant)
(39034 Points)
Replied 11 December 2009
Cusotmised software is also goods as per the Chennai HC decision if I am not mistaken in the case of Infosys tech. Therefore VAT would be payable only.
As per the terms of the agreement if property passes at the time of delivery then there should be no problem.
BeyondConsultants
(CA/CS/LLB(DU))
(184 Points)
Replied 11 December 2009
Then what is the purpose of IT Service as introduced in Finance Act. Further what is the relevance of BSNL Supreme Court Decision.
Saurabh
(Article)
(36 Points)
Replied 11 December 2009
Sir,
confused now
shud VAT be charged or not...?
BIJAY KUMAR RUNGTA
(CA FINAL STUDENT)
(85 Points)
Replied 15 December 2009
First thing that service tax will be applicale if service provider provided its service exceed of Rs.10,00,000 in a single financial year,then service tax liability will be arise on tn the part of service provider........ and i service tax is charged (in case of of service exceeds by Rs.10 lakh) then it will be deducted on the basic amount only.
Madhukar N Hiregange
(Chartered Accountant)
(39034 Points)
Replied 15 December 2009
The inclusion of the IT services in 2008 and the amendment in 2009 as far as the last 2 categgories are concerned is at divergence with the SC case in TCS and against the defintion of Sale as envisaged in the constirution.
BSNL SC case clearly set out that on the value of the sale, service tax should not be charged andon the value of services sales tax should not be charged.
The CBEC has categorically stated that they are NOT concerned with what is the treatment under VAT. This is not reasonable and we are reasonably sure that SC would strike down the levy under servic etax on these grounds.
Anyway a difficult time for the industry.
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