TaxTMI 
TaxTMI 
A new Company has started devloping software and which will be sold as Packaged software to their customers. Along with VAT , whether Company has to charge Excise Duty or Service Tax . Being a company owned by Foreign Comapny, whether exemption limit of 1.50 crore in excise can be availed.
Applicability of excise duty or service tax - packaged software
19 May 2009 
1 Reply 
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Excise duty on packaged software applies to domestic sales; imports attract customs duty and no service tax applies.
Packaged software developed and sold in India is subject to central excise duty and local VAT and is not liable to service tax; domestic developers may claim the SSI exemption threshold subject to the conditions of the applicable excise notification. Software developed abroad and imported into India is subject to customs duty and does not qualify for the SSI exemption when treated as an import. (AI Summary)
Packaged software developed and sold in India is subject to central excise duty and local VAT and is not liable to service tax; domestic developers may claim the SSI exemption threshold subject to the conditions of the applicable excise notification. Software developed abroad and imported into India is subject to customs duty and does not qualify for the SSI exemption when treated as an import. (AI Summary)