TaxTMI 
TaxTMI 
2020 (2) TMI 1377
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.... rendering Information Technology Software Services and are not discharging service tax on the taxable income realized by them, the officer of SIR cell of Chennai, Service Tax Commissionerate initiated investigation. During investigation, it was noticed that the appellants developed Anti-Virus Software for their own use and market the same under their own brand name "K7-Toral Security". They obtained CD containing the software manufactured by I.P. Softcom having their manufacturing plant at Rudrapur. The K7 Anti-virus software takes care of Anti-virus protection, Anti Spyware, E-mail Scanner and Real Time Scanner. These softwares can be downloaded from their website. Based on the purchase orders received from the respective clients, the dow....
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....il outlets. The appellants also sell this software online by permitting the purchaser to download the software. A product key is provided with the software to the purchaser to download the software and to obtain the updates online. The appellant charges on an annual basis for supply of the software and also recover renewal fee. The department is of the view that since the product key is provided by the appellant and the key so provided being computers, customer specific, this activity would fall under Information Technology Software services. It is explained by the Ld. Counsel that the product key is provided to ensure that the purchaser could not use the software in multiple computers and also to identify the computer to ensure the c....
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....le to use the software. Thus, the activity rendered includes providing the license key for installing the software and would fall under Information Technology Software Services. He argued that the demand confirmed does not require any interference. 5. Heard both sides. 6.1 The fact giving rise to the demand of service tax has been narrated in the above paragraphs. The short issue which arise for consideration is whether the appellant is liable to pay service tax for the Anti-virus software provided in a CD or through direct downloads. The Tribunal in the case of Quick Heal Technologies Ltd., in Final Order No. 50022/2020 dated 09.01.2020 had occasion to analyze the very same issue with regard to the sale of Anti-virus software. Rele....
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....hey have been detected and removed. No interactivity takes place nor there is any requirement of giving any command to the software to perform its function of detecting and removing virus from the computer system. It is also seen from the meaning assigned to 'interactive' that a program should involve the user in the exchange of information. There has to be action and communication between the two. A user should communicate with the computer facility and receive rapid responses, which can be used to prepare the next inputs. In contract, in other softwares like ERP, EXCEL, MS Word, there is continuous interaction between the user and the computer system and these softwares perform only after receipt of input from the user. 35. It i....