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Taxability of services - Service Tax

Issue Id: - 263
Dated: -26-09-2006
By:- sunil mehta
Taxability of services
whether the foll: services are liable to servicetax? : (A)i)web-designing ii)web-hosting iii)web-based software iv)portal development & other related work. (B)Any other custmised software(non web based)
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Dated: - 27-09-2006
By: - Surender Gupta
Web designing, hosting, software development and other related activities are not liable to service tax.

Dated: - 28-09-2006
By: - Madhukar N Hiregange
It appears that all the services are software development service therefore may not be liable at all.

Dated: - 29-09-2006
By: - Vijay Chitte
Dear Sunil, As per your query web designing, web hosting is a taxable service under the catergory of "Business Support Service". The act provides for a defination of BSS which it includes the term "Infratructural support services". For the purpose of this clause, the expression "Infrastructural support services" includes providing office along with office utilities, lounge, reception, with competent personnel to handle messages, secretarial services, internet and telecom facilities, pantry and security". Web Hosting service can be said to be "Business Support Service" since it support the "Business activities" of an organization. Internet and Web Hosting" is a "base" and an "underlying foundation" for the web presence of an organization. A web presence allows an organization to carry out their business effectively and with higher efficiencies. Therefore, providing "Web Hosting" is "infrastructural" in nature. If you are selling the customised software then 4% vat applicable and if you are providing customised related serivce, then its fall under the "Repaire and maintainance of computer software service" for details, you may refer circular "F.No. 81/2/2005-st. Vijay Chitte-Claris.

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