Liability of excise duty on packaged accounting software

[Guest]

Sir, apropos your article on the subject, kindly clarify whether excise duty will be payable on accounting software( which is developed,packaged & sold by a foreign company in its brand name),when it is sold to a customer in India: (a)by the foreign company directly,through the internet, and sale proceeds are received abroad ' (b) by subsidiary of the foreign company in India without any value-addition or modification, either through the internet or 'off-the-shelf', and (c)by subsidiary of the foreign company in India with customisation or modification, either through the internet or 'off-the-shelf). Thank you

[Surender Gupta]

Import of software into India and sold thereafter will not attract duty of excise but it will attract duty of customs. where the software is imported into India it becomes irrelvent that these are sold directly to the cusomter or through its office in India, customs duty whereever applicable is to be paid on applicable rate of duty. However, if the software is imported into India and customized in India according to the specification of the Customers in Indis, It will remain exempt from duty of excise.

AI Summary

Customs duty applies to imported accounting software sold in India while excise may be avoided if customized domestically. Imported packaged accounting software sold in India attracts customs duty rather than excise, whether sold directly by the foreign supplier or through an Indian office/subsidiary without value addition; where imported software is customized in India to customer specifications, it remains exempt from excise.