TaxTMI 
TaxTMI 
Service Tax on software
17 Oct 2010 
3 Replies 
1310 Views Asked by
Service tax on software: classification of development, maintenance and transfers determines indirect tax liabilities and allocation.
Design, development, upgradation and advisory software services are taxable as information technology services; maintenance is taxable as maintenance or repair. Transfers of software on physical media are subject to VAT/CST, imports of packaged software on media attract customs duties, and domestically supplied packaged software on media may be subject to excise. In some states software development/maintenance may be characterised as a works contract with VAT implications. Payment of service tax can exclude the right-to-use portion from other taxes. (AI Summary)
Design, development, upgradation and advisory software services are taxable as information technology services; maintenance is taxable as maintenance or repair. Transfers of software on physical media are subject to VAT/CST, imports of packaged software on media attract customs duties, and domestically supplied packaged software on media may be subject to excise. In some states software development/maintenance may be characterised as a works contract with VAT implications. Payment of service tax can exclude the right-to-use portion from other taxes. (AI Summary)
What is the latest position of service tax on software