VAT/CST rate on software license

[Reshma kochar]

Dear Experts,

Do let me know the current HVAT/CST rate as applicable, in case a software company is providing its own softwares to its clients. 

Regards,

Reshma

[YAGAY andSUN]

The rate of VAT on software licences under HVAT Act will be 5% along will surcharge of 5% as it duly falls under intangible goods in Schedule C.

[Reshma kochar]

That means effective rate will be 5.25%. Sir if the sale is inter state sales, should attract the CST than. what will be CST rate?

Regards

Reshma

[YAGAY andSUN]

CST rates are governed by the VAT rates.

[Sujeet Rai]

Hi If u purchase a third party software in Delhi ( a renewal license for a hardware appliance) and bill it to a customer at Gurgaon what all taxes will be levied? will it attract service tax as well as CST ?

Regards

Sujeet

[chetan rachhadiya]

dear reshma, please see the below link this might be useful to solve your query:

https://www.linkedin.com/groups/Sir-We-have-purchased-ERP-2729192%2ES%2E5950940929895518212?trk=groups_search_item_list-0-b-ttlandgoback=%2Egna_2729192

AI Summary

VAT on software licenses: intangible goods classification leads to VAT plus surcharge; CST follows VAT rates. Software licenses are treated as intangible goods in Schedule C and attract VAT at 5% under the HVAT Act with an additional 5% surcharge; interstate supplies are governed by Central Sales Tax, whose rates are linked to VAT rates. The discussion also queries whether purchases of third party software billed across state lines may attract service tax as well as CST/VAT, highlighting potential overlap between goods and service tax characterisation for software transactions.