Service Tax on Software Keys Distributors

[Akash Shinghal]

Dear All,

The company is an importer distributor of license keys of software which subsequently exports or sells in the domestic market the license keys to the end user without any modification. Whether the same is liable to Service Tax?

The case is typically of a distributor who is not using the software license for its own purposes.

Regards,

Madhav Kalani

AI Summary

Supply of software license keys as service can attract service tax; import mode and intermediary role affect VAT and tax liability.
Supply of product keys and activation credentials is characterised as a service for tax purposes and can attract service tax, supported by precedent and an advance ruling. Import mode and contractual sale terms influence whether VAT also applies. If the distributor functions as an intermediary, service tax charged on electronic supplies may extend to subsequent sales by the intermediary.