TaxTMI 
TaxTMI 
2022 (4) TMI 1290
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....has sought advance ruling in respect of the following questions:- a) Whether software licenses supplied by the applicant qualifies to be treated as Computer Software resulting in supply of goods and are therefore to be classified under Chapter Heading 8523 80 20?. b) Whether the benefits of Notifications No.45/2017-Central Tax (Rate), Notification (45/2017) No.FD48 CSL 2017, Bengaluru and Notification No.47/2017-IGST (Rate) all dated 14.11.2017 are applicable to the software licenses supplied by the Applicant to the institutions given in the notification? 3. Admissibility of the application : The applicant, filed the instant application, in relation to applicability of notification & whether their supply amounts to supply of goods, on the issues covered under Section 97(2)(b) & 97(2)(g) of the CGST Act 2017 and hence the application is admitted. 4. Brief Facts : The applicant furnished the following facts, relevant to the questions raised in the instant application inter alia stating as under: 4.1 The applicant are engaged in supply of scientific & technical equipment and time based & perpetual software license to Public Funded Research Institutions recognized by Government ....
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....of India. Thus the applicant procures the products from their principal partner and supplies to the customers in India. The applicant, in all cases, is a reseller of software and does not own the IPRs for the said software supplied. 4.6 The applicant, in terms of EULA (End User License Agreement) shall not,- * Copy, merge or transfer copies of the software or the documentation except as may be expressly and specifically authorised in the said agreement * Modify, under any circumstances, reverse engineer, decompile, disassemble or otherwise attempt to discover, reconstruct or identify the source code for the software or any user interface techniques, algorithms logic, protocols or specifications included, incorporated or implemented therein and * Modify, port, translate or create derivative works of the software. 4.7 The EULA is entered between the Keysight Technologies Inc. and the Customer, as per which the usage of the Keysight software is governed. Applicant quoting the standard EULA, emphasising the clauses 3 & 7, with regard to the ownership of software, stated that it is evident from the reseller agreement and the EULA that the software supplied by them is a package s....
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.... of research and therefore exclusion of computer software on merely technical grounds would defeat the purpose of the said notification. c) The Hon The Apex Court in the case of Tata Consultancy Services Vs State of Andhra Pradesh [2004 (178) ELT 22 (SC)], while dealing the question whether the 'canned software' can be termed to be 'goods' and as such assessable to sales tax under Andhra Pradesh General Sales Tax Act, 1957, held as under:- 24. A "goods" may be a tangible property or an intangible one. It would become goods provided it has the attributes thereof having regard to (a) utility (b) capable of being bought and sold (c) capable of transmitted, transferred, delivered, stored and possessed. If a software whether customized or non-customised satisfies these attributes, the same would be goods". d) The Explanatory Notes to the Scheme of Classification of Services under GST stipulates that the services of limited end-user licence as part of packaged software are excluded from the SAC 997331, which covers Licensing services for the right to use computer software and databases. e) The FAQ issued for GST on Information Technology (IT) and IT Enabled Servic....
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....puter software' in terms of Notification No.45/2017-Central Tax (Rate) dated 14.11.2017, on the grounds that their customers are mainly Government Departments, Public Funded Research Institutions and Public Sector Undertakings; that the institutions to whom they have supplied have issued certificates to that effect from an officer not below the rank of the Deputy Secretary to the Government of India or the Deputy Secretary to the State Government or the Deputy Secretary in the Union Territory certifying that the goods supplied by the Applicant are purchased for research purpose only. 5.3 The applicant further contends that this Hon hie Authority has answered similar questions in an identical factual situation, which have been raised in the present application, in affirmative in the cases of Solize India Technologies (P) Ltd., and SPSS South Asia Pvt. Ltd.. The Hon'ble Authority, in the said cases has ruled that the software sold by the applicants is a pre-developed or pre-designed and made available through the use of encryption keys and hence it satisfies all the conditions that are required to cover them under the definition of "goods". Further, the goods which are supplied ....
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....f the said software is controlled through "encryption keys"; the said software is a packaged software but not tailor made one, to suit individual requirement and these software are "pre-designed" and "pre-developed"; they are charging 18% GST on their supply of software licence to the Public Funded Research Institutions and Institutions registered under Government of India in terms of entry No.17(ii) of Notification 11/2017-Central Tax (Rate) dated 28.06.2017 on treating the said supply as supply of service, classifying the same under SAC 9973, as the supply of software i.e. the right to use a certain intellectual property in the form of software clearly amounts to supply of services in terms of entry 5( c ) of Schedule II of the CGST Act 2017. 10. The applicant, however, contended that their supply of software licence(s) qualifies to be "Supply of goods" on the grounds that as per the Explanatory Notes to the Scheme of Classification of Services the SAC 997331 excludes the services of limited end-user licence as part of packaged software. The applicant further contends that the said supply is entitled for concessional rate of GST @ 5%, in terms of the Notification No.45/2017-Cent....
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....o the following conditions.- (i) The goods are supplied to or for - (a) a public funded research institute or a University or an Indian Institute of Technology or Indian Institute of Science, Bangalore or a Regional Engineering College, other than a hospital subject to the condition that such institutions are under the administrative control of the Department of Space or Department of Atomic Energy or the Defence Research Development Organisation of the Government of India and such institution produces a certificate to that effect from an officer not below the rank of the Deputy Secretary to the Government of India or the Deputy Secretary to the State Government or the Deputy Secretary in the Union Territory in the concerned department to the supplier at the time of supply of the specified goods or (b) an institution registered with the Government of India in the Department of Scientific and Research and such institution produces a certificate from an officer not below the rank of the Deputy Secretary to the Government of India or the Deputy Secretary to the State Government or the Deputy Secretary in the Union Territory in the concerned department to the supplier at the time....
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....te value of prototypes received by an institution does not exceed fifty thousand rupees in financial year. (i) The goods are supplied to or for - (a) a public funded research institution under the administrative control of the Department of Space or Department of Atomic Energy or the Defence Research Development Organisation of the Government of India and such institution produces a certificate to that effect from an officer not below the rank of the Deputy Secretary to the Government of India or the Deputy Secretary to the State Government or the Deputy Secretary in the Union Territory in the concerned department to the supplier at the time of supply of the specified goods; or (b) an institution registered with the Government of India in the Department of Scientific and Industrial Research and such institution produces a certificate from an officer not below the rank of the Deputy Secretary to the Government of India or the Deputy Secretary to the State Government in concerned department to the supplier at the time of supply of the specified goods; (ii) The institution produces, at the time of supply, a certificate to the supplier from the Head of the Institution, in each ca....