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Vat or cst on web development

AK (Sales) (100 Points)

12 October 2013

Is VAT or CST applicable on Website Development service?

The website development is done on customer's server via internet.

The company providing website development service is doing domestic turnover of less than 9 lakhs and not registered with service tax at present nor charging service tax to customers. Some customers are deducting 10% TDS.

Regards,

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2 Replies

Harshal Fifadra (Chartered Accountant) (1489 Points)
Replied 12 October 2013

I assume from your query that the dominant intention is to provide service . if it is so, then vat or cst is not applicable . Vat or Cst is applicable when there is a transfer of property in goods . Website development service doesn't involve any transfer of any property in goods , hence vat or cst is not applicable.

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Chinnu Raj (CA Final Student B.Com) (1067 Points)
Replied 12 October 2013

VAT or CST will be applied only in the case of purchase or sale of goods i.e, when there is a transfer of goods. In this case there is no transfer of any goods,so VAT or CST cannot be applied and as their is a service,service tax may be applied...