Liability of service tax and vat - Tds applicability

[Sanjeev Sharma]

if a company imports software in CDs ( with perpetual licenses) from abroad and sells it in local market, what is the service tax and VAT liability on it ? Is there any TDS issue also involved ?

AI Summary

Clarification on tax liability: VAT applicable on imported software with perpetual licenses; service tax not applicable. TDS required unless exempted. A query was raised regarding the service tax and VAT liability on importing software on CDs with perpetual licenses and selling it locally, along with any TDS implications. The response highlighted a Delhi High Court decision in the 'Samsung Electronics' case, which mandates tax deduction at source for payments to non-residents unless pre-authorized by the Assessing Officer. The Supreme Court has temporarily stayed tax collection related to this decision. It was clarified that service tax is not applicable since software is considered goods, but VAT is applicable.