service tax on software license

[velayutham panchatcharam]

We are a branch office of foreign company situated in SEZ in India. Our Head office buying software license (MS Office license) and give to branch office on the basis of rent or lease. is any impact on service tax on branch office side. Pls clarify in detail.

[Surender Gupta]

Receiving software from the parent company / head office can not be treated as import of services liable to service tax. But, the issue is required to be seen in details that what is the nature of software bought by the head office? 

AI Summary

Import of services on intra-group software transfers not treated as taxable service; outcome depends on the software's nature. Receiving software from the parent company or head office, supplied for use by a branch office in a Special Economic Zone, ordinarily does not constitute import of services liable to service tax; the decisive consideration is the legal and commercial nature of the software acquired by the head office and the licence terms under which it is provided to the branch.