Rajib Saha (Accounts Officer) (239 Points)
22 September 2013Dear All,
My client is in the business of developing Software products as per Customer's spcification. He is carrying on the business under proprietory status. Is he liable for Service Tax ?. If yes,on what percentage of his billed amount?
It will be highly appreciated if I get the hint.
CA Vivek Goyal
(Practising CA)
(148 Points)
Replied 01 October 2013
Dear Rajib, Software design services is now covered under service tax regime under declared service. So he should charge service tax if value of taxable services exceeds Rs. 10 Lacs.
Rajib Saha
(Accounts Officer)
(239 Points)
Replied 02 October 2013
| Originally posted by : CA Vivek Goyal | ||
 |
Thank you, Mr. Goyal, Actually, my client is developing software and selling it to his customer. Will it come under "Service" ?. Can we treat this as "sale" or transfer of technology?
RAJIB |
|
CMA.Baskar.V
(Cost Accountant)
(400 Points)
Replied 03 October 2013
It is considered as taxable service under notification no.18/2008 dated 10.05.2008.
According to notification:
Taxable Service” means any service provided or to be provided to any
person, by any other person in relation to information technology software,
including,-
(i) development of information technology software,
ii) study, analysis, design and programming of information
technology software,
(iii) adaptation, upgradation, enhancement, implementation and other
similar services related to information technology software,
(iv) providing advice, consultancy and assistance on matters related to
information technology software, including conducting feasibility studies on
implementation of a system, specification for a database design, guidance and
assistance during the start up phase of a new system, specifications to secure
a database, advice on proprietary information technology software,
(v) providing the right to use information technology software for
commercial exploitation including right to reproduce, distribute and sell
information technology software and right to use software components for the
creation of and inclusion in other information technology software products,
(vi) providing the right to use information technology software
supplied electronically.
(Section 65 (105) (zzzze) of Finance Act, 1994 as amended)
CA Vivek Goyal
(Practising CA)
(148 Points)
Replied 03 October 2013
Yes, Service tax is leviable on development of softwares as per declared services.
Pawan Mittal
(CA Final)
(711 Points)
Replied 04 October 2013
Dear Rajib
I respect the opinion of all the experts. But in my opinion a software for which a price is charged and the ownership is transferred to the buyer for whole life that is liable to VAT and not chargeable to service tax. e.g. Window 7, 8 etc.
But if annual charges are charged for using a software than that is liable to service tax. e.g. Quick Heal charges annual charges for the software.
CA Vivek Goyal
(Practising CA)
(148 Points)
Replied 05 October 2013
Dear pawan, In service tax this criteria is not specified anywhere as you have mentioned so I think we can not segregate services on criteria which you have defined. Service Tax shall be levied on all developments of softwares.
Venkadesh
(MD)
(21 Points)
Replied 08 September 2014
Dear Sir,
Is WEB Development also come under Service Tax?? If so, what's the maximum value for Tax? Recently we've done a web development for a company for the worth of 1.5 Laks. Do I need to pay any Service Tax??
Rahul Ram
(student)
(29 Points)
Replied 02 February 2017
Is it taxable even if the services are rendered to Abroad Clients ??
Landmark Judgments: Important Provisions of the EPF & ESI Act interpreted by the Honorable Supreme Court of India
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