Service tax and VAT on Software?

[deepak kalambate]

Dear Sir,

We have purchased MS Office 2010 software (open license) from from Microsoft. It was routed through local dealer.

The Dealer has charged Service Tax and VAT both in the invoice.

Pl advise whether he can charge service tax and also vat both in this type of transaction as this is purely software license purchase transction.

 

AI Summary

Clarification on Taxation: Packaged Software Attracts VAT, Not Service Tax, Unless Customized; Supreme Court Ruling Cited A user inquired about the applicability of Service Tax and VAT on the purchase of MS Office 2010 software, questioning whether both taxes can be charged on software license transactions. A respondent cited a Supreme Court judgment, suggesting that software is treated as goods, attracting only VAT/CST. Another user requested case laws, while others discussed whether the software was downloaded or purchased as a physical license. It was clarified that packaged software is considered goods, subject to VAT, not Service Tax, unless it is tailored software. A circular was referenced, explaining tax applicability on packaged software and related licenses.