Service Tax applicability on developing application software

[Narasimha Subramanian]

Hi, We are developing application software on SAP. Are these charges liable to service tax?

[Surender Gupta]

Absolutely no.

[Madhukar N Hiregange]

There is no service tax on software deveoplment

Software development is not taxable but software maintenance is taxable since software is considered as goods. Vijay Chitte-Claris

AI Summary

Service tax applicability on software development: development often viewed non taxable, maintenance may attract levy.
Whether charges for developing application software attract service tax. The query on taxability of custom SAP development drew responses stating development services are not subject to service tax, while one respondent distinguished that software maintenance is taxable because software may be characterised as goods.