Information Technology Software Service

[jitendra Gupta]

As perSection 2(d) read with Section 2(f) of the central Excise Act,1944, Customised software is an excisable goods and covered under 'Information Technology Software' under chapter heding 85248000, though the duty involved has been exempted vide Notification no 6/2006 CE as amended vide Notification No.6/2008 C.E..

Simultaneously, service tax has also been levied on the Development of Information Technology Software.

An assessee develops customised software and sells it to specific customers after payment of Service Tax.  The assessee is registered service provider of 'Management, Maintenance and Repairs' Service.  He also pays service tax on Annual Maintenance Contracts of the softwares sold by him.

In which case, excise duty will be paid on the software, had it not been exempted, and in which case will it attract Service Tax.

AI Summary

Customized Software Exempt from Excise Duty but Subject to Service Tax Under Central Excise Act, 1944 An individual inquired about the applicability of service tax and excise duty on customized software under the Central Excise Act, 1944. They noted that while customized software is considered excisable, it is exempt from duty under specific notifications, yet service tax is still applicable. A respondent clarified that packaged or canned software is not exempt under Notification No. 6/2006 CE. However, Notification No. 53/2010 ST exempts software if excise or customs duties are paid on the MRP value. Therefore, a developer selling customized software after availing of the exemption must still pay service tax.