Hello,

We are a SW product development company. Our income can be classified in to (i) from license selling and (ii) from services (AMC, customer visit etc).

Our turnover was more than 10 lcs earlier, so we had registered with service tax dept. But in the last two years, our turnover is less than 8 lacs.

We were not aware of the service tax applicability for software products and we were not collecting service tax on this. We have been paying service tax on the service income (not on the software license selling).

Now do we have to pay service tax on the SW sales of the previous period (considering that our total turnover was less than 8 lacs)? Yes, we have been paying service tax on the service income. (Summary - Though our turnover was less than 8 lacs, we are registered with Service tax dept and we were paying tax on part of the income).

What is the best way out from here onwards?

Valuable guidance sought. Thanks in advance

Regards,
Bala