Canned software sold on media can qualify as goods and be subject to sales tax.

Canned software marketed on floppies, disks or CD-ROMs is treated as "goods" for sales tax purposes under the Andhra Pradesh General Sales Tax Act, 1957. The concept of goods is of wide amplitude and is not confined to tangible movable property; property capable of abstraction, consumption, use, transfer, delivery, storage or possession may qualify. Although software embodies intellectual property, once it is copied onto a medium and sold as a commodity, it becomes an article of trade with market value. The distinction between the software's intellectual content and the physical medium does not prevent taxability when the product is marketed for sale.

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Issues: Whether canned software marketed on media such as floppies, disks and CD-ROMs constitutes "goods" liable to sales tax under the Andhra Pradesh General Sales Tax Act, 1957.

Analysis: The definition of "goods" under the Act and the constitutional meaning of goods are of wide amplitude and are not confined to tangible movable property alone. Property that is capable of abstraction, consumption and use, and that can be transmitted, transferred, delivered, stored or possessed, falls within the expression. Software, though it embodies intellectual property, when copied onto a medium and marketed as a commodity, becomes an article of trade with market value. The distinction between the intellectual content and the physical medium cannot defeat taxability where the software is sold as a marketable product.

Conclusion: Canned software sold on media is goods and is exigible to sales tax under the Act.

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