import of Software with license in CD

[Pradeep Jain]

We have imported one Engine Calibration System from one supplier situated in Germany

From the same supplier we have to purchase licensed software to make above referred Calibration Sys. workable

The software will be supplied in CD

Is the import transaction of License Software attracts any Tax liability such as Customs Duty, Service Tax etc.

Please provide legal opinion

Regards,

 

[Radha Arun]

Please see http://www.udyogsoftware.com/documents/10523/e39dc3c2-0c39-4a5a-8943-087a6ee13196. 

[YAGAY and SUN]

Category of Software	Excise Duty[ in case Manufacture in India]	Custom Duty [In case of Imports]	Service Tax	VAT/ CST
Packaged Software with MRP	Yes	No basic but CVD and SAD	No	Yes
Packaged software where MRP not required	Excise duty on cost of media	No basic but CVD and SAD on cost of media	Service Tax on transfer of right to use software	Yes
Tailor made software	No	No	Yes	Yes
Paper License of software and PUK card	No	No	Yes	Yes
Software downloaded on internet form out of India	No	No	Yes	NA to person downloading software

AI Summary

Import of licensed software may attract customs duties on the physical media and service tax as transfer of right to use.
For software supplied on CD, customs duties (including CVD and SAD) can apply to the cost of the physical media on import, while indirect taxes like service tax and VAT/CST may attach to the transfer of rights in the software depending on classification: packaged software with MRP attracts excise and VAT/CST, packaged without MRP may attract excise/customs on the media and service tax for transfer of right to use, and tailor made software or paper licenses typically draw service tax and VAT/CST; downloads have service tax but no customs/excise on media.