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2010 (12) TMI 101 - AT - Service TaxSoftware - annual maintenance contract - assessee liable to provide maintenance service on application software system during the tenure of the agreement - Held that: - In the case of SAP India Pvt Ltd. (2010 -TMI - 201706 - CESTAT, BANGALORE) a Division bench of this Tribunal classified similar activity as information technology service under Section 65 (53 (a) of the Finance Act, 1994 and held that the same was exigible to service tax under Section 65 (105) (zzzze) of the Act with effect 16/05/2008. Such service was not taxable prior to the said date. What was considered by the Honrable Supreme Court in Tata Consultancy Service (supra) was computer software, which is essentially different from application software. The software which is inbuilt in a computer, which is otherwise called operating software, is known as computer software in common parlance. The decision in Tata Consultancy Service (2004 -TMI - 4143 - Supreme Court) is applicable to such software. Such software, no doubt, involves intellectual property. Application software also involves this property. However, the legislature in its wisdom has chosen to differentiate application software from operating software (computer software) for the purpose of levy of service tax and, accordingly, the maintenance of application software has been specifically designated as information technology software.
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