Hi all,
We planning to purchase windows OS for business purpose as 46 license worth Rs.525000,they vendor given quotation and charging service tax @ 12.36% as well as VAT @ 5% on Software value is this correct or not? please clarify .
ramesh (accounts executive) (68 Points)
14 September 2013Hi all,
We planning to purchase windows OS for business purpose as 46 license worth Rs.525000,they vendor given quotation and charging service tax @ 12.36% as well as VAT @ 5% on Software value is this correct or not? please clarify .
CA LOVELY ARORA
(C.A. B.Com (H) Graduate)
(2151 Points)
Replied 14 September 2013
Dear Sir,
yes, it is correct... because the software is prepared by the vendor from whom you are purchasing the windows OS.... and they are charging service tax for the service of preparation/drafting of software as per client's requirement and they are charging VAT for the sale of the same... and as you said, you are purchasing licences for the same, thus levying of service tax is justified in my opinion...
Manoj Agarwal
(Service Tax Consultant Rourkela ServiceTaxExpert@yahoo.com)
(3456 Points)
Replied 19 September 2013
Packaged Softwares like OS is a goods and the transaction is that of sale of goods. The vendor is simply purchasing and selling the Windows OS...means he is trading in goods, which is covered under negative list u/s 66D. So, only VAT can be levied.
Kindly mail for further clarifications, if any.
Regards,
Manoj Agarwal
ServiceTaxExpert @ yahoo.com
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