Dual taxation(service tax + vat)

[Guest]

whether any notification or circulars are available for Dual taxes (service tax + vat) which are applicable to certain software licensing products - applicable from June 2008?.

[Ravi Chopra]

I think no. There is no particular notification or circular which covers both the issues and clarify applicability of particular tax in particular circumstance.

[Guest]

Both the taxes are levied by different statutory authorities in exercise of different powers. VAT is applicable on sale of goods and service tax is applicable on transfer of right to the extent the issue is pertaining to software. I believe that there is need to make the statutory provision clear itself. Alternatively courts would decide the issue in due course. But any circular or clarification would help the tax payer in the meantime, if issued by the board. We all wish that board should come out with some clarification on this issue which is being faced by all.

AI Summary

Dual taxation: overlapping VAT and service tax on software licences raises need for statutory clarification or board guidance. Dual taxation issues arise where service tax and VAT may both apply to software licensing introduced from June 2008; VAT applies to sale of goods while service tax applies to transfer of a right relating to software. No specific notification or board circular clarifies allocation of tax liability between the two regimes, leaving resolution to statutory clarification, administrative guidance, or judicial determination.