Exemption to Media containing recorded Information Technology Software:

[Guest]

Dear Sir,

Please advise on Exemption to Media containing recorded Information Technology Software in simple words from both point of view Excise and Service Tax.

[KASTURI SETHI]

Sh.Sandesh Shinde Ji,

Media containing recorded Information Technology Software is a packaged software or canned software. It is classified under Chapter/Sub-Heading No.8523 80 20 of Central Excise Tariff Act attracting Central Excise duty @12.50 Adv. It is also covered under MRP vide Notification No. 30/2010-C.E. (N.T.), dated 21-12-2010] There is abatement of 15% from MRP declared on the said package vide notification no.49/2008-CE (NT) dated 24.12.2008 as amended. If MRP is not required to be displayed on the package as per the Standards of Weights and Measurement Act, 1976((60 of 1976) exemption from Central Excise duty is available on that portion of the product on which Service Tax has been paid.(Notification No.14/11-CE dated 1.3.2011 as amended refers.). It means CE duty is not to be paid on that consideration/portion on which Service Tax has been paid and declaration to this effect that ST has been paid, or payable has to be made to the A.C./D.C. Naturally Service Tax registration no. is also to be mentioned in the Declaration.

You may also go through Notification No.11/16-CE and 11/16-Customs both dated 1.3.16.

AI Summary

Classification of packaged software under excise: MRP valuation, abatement, and exemption where service tax is paid requires declaration. Packaged recorded IT software is classified as recorded goods for excise and subject to Central Excise duty under the applicable tariff; MRP valuation rules apply with a prescribed abatement from declared MRP. If MRP marking is not required under weights-and-measures standards, Central Excise exemption is available for that portion on which Service Tax has been paid, provided a declaration stating Service Tax has been paid or is payable (including Service Tax registration number) is furnished to the assessing officer.