Registration under service tax

[Anthony Trinidad]

1. Service Tax is to be levied on Information Technology Software Services w.e.f. 16-5-2008. Will a service tax registration be necessary for a software house which is under STPI and exports 100% of its developed software which is in excess of Rs 1.50 crores ? All payments are received in foreign exchange. 2. Can refund be claimed for service tax paid on inputs even though there is no service tax chargeable by the developer at all ?

[Surender Gupta]

Since the software is taxable, you may avail cenvat credit and claim refund of cenvat credit on the basis of export of services / goods. For this purpose you need to obtain service tax registration.

[Madhukar N Hiregange]

It is important to note that under the reverse chagre mechanism of taxation under Section 66A a resident is liable for the services recived from a non resident ( even associate now- journal entry is sufficient) from 19.4.2006. If no such services are recived as a recpeint of services from outside India such a unit need not be registered. However we.f. 16.5.2008, it is advisable for a IT/ ITES STPI/ Exporter to register under service tax ONLY if it is interested in refund of the service tax paid by the concern.

AI Summary

Service tax registration required to claim cenvat credit and refunds for taxable IT software exports after levy. Registration is required to access cenvat credit and claim refund of cenvat on inputs for exporters of taxable IT software services; where a resident receives no services from non residents under the reverse charge mechanism it need not register, but STPI IT/ITES exporters are advised to register if they intend to claim refunds or cenvat credit.