Software development

[Guest]

Sir,

What is the tax to be levied on software development? What are the circumstances in which only Service Tax is applicable and only Sales tax is applicable? Whether there are any circumstances where both the taxes are applicable?

[KASTURI SETHI]

Reply to your all queries on this issue is available on google. Both Service Tax and VAT are applicable depending on the usage and mode of sale. Post the question, "Whether Service Tax is applicable on software development ?" Central Excise duty has been exempted. This also falls under Chapter 85 of Central Excise Tariff Act.

[Himansu Sekhar]

You are correct kasturi sir.

[Ganeshan Kalyani]

I think we are Google for them. The data available in Google is not authenticated by expert. Whereas expert in TMI answers in a simple manner and with reference to law. This suffice their need and solves their issue.

However i do agree with your views as well because the querist is not a novice.

[KASTURI SETHI]

Sh.Ganeshan Kalyani Ji,. I agree with you. There is a very good article by Sh.Singhal CA on some site which solves all the situations described by the Querist.

AI Summary

Service Tax on software development depends on whether supply is a service or a sale; VAT may apply in other modes. Applicability of indirect taxes for software development depends on the nature of supply, mode of delivery, and end use: Service Tax may apply where software is provided as a service (bespoke or with ongoing obligations), VAT may apply where software is treated as a sale of goods or packaged product, and both can arise in particular factual matrices; Central Excise duty has been exempted and classification in the tariff chapter aids but does not alone determine taxability.