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Service tax on software n availment of credit

V (52 Points)

10 May 2007

Hi all,

Can supply of software would be liable to service tax ?

Also, if one had imported services and paid service tax on such services in relation to supply of software outside india. can cenvat credit on service tax paid for imported services be available which can be utilised against supply of services in india ? if yes, How ?

Also if services are imported and service tax is paid but no software are exported. Would answer be different from the above one ?

Thanks and regards,

Varun

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Jai Singh Negi (31 Points)
Replied 31 August 2007

Software is a product hence it is subject to excise duty but by notification issued by government it is exempted from excise duty.
As per section 66A of finance act 1994, the service receiver shall be liable to pay service tax in respect of services provided from a place outside india and consumed in india. such liabilty can not be discharged by utilising Cenvat Credit available. But once such liabilty is discharged by means of payment of service tax on import of service through TR-6 challan, the service tax so paid shall be available for cenvat credit and has to do nothing with the export of software.