Taxability - import of services

[Guest]

Co. A in India has got a software for perpetual use by its foreign collaborator on a one time lump sum payment basis. Updates will be given either free for 3 years and after that on annual payment. Will the payments be taxable under import of services ?

[Guest]

As of now, service tax is not leviable on the software sale, implementation or updation charges. Thus, no service tax liability would arise under import of services in such a case.

AI Summary

Service tax on imported software payments not leviable, so lump sum software sale and updates do not trigger import of services tax. Charges for a one time lump sum perpetual software transfer, and associated implementation or updation fees (with initial free updates and later annual updates), are not leviable to service tax and therefore do not attract import of services taxation in the stated scenario.