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

Clarification on Excise Duty for IT Software: Classified Under Chapter 8523 80 20, 12.50% Duty with 15% MRP Abatement. A query was raised regarding the exemption of media containing recorded Information Technology Software from excise and service tax. The response clarified that such software is classified under Chapter/Sub-Heading No. 8523 80 20 of the Central Excise Tariff Act, attracting a 12.50% excise duty. There is a 15% abatement from the MRP as per specific notifications. If the MRP is not required on the package, an exemption from excise duty is available on the portion where service tax has been paid, subject to necessary declarations and service tax registration details. Relevant notifications were also referenced for further guidance.