TMI BlogChargiability of service tax on software developmentX X X X Extracts X X X X X X X X Extracts X X X X ..... We are a Bangalore custom software development firm. Most of our clients our domestic. We follow a project based billing on quotes determined at the begining of the project(we do bill on actual hourly/monthly basis). We do not have any software products. We have been paying vat @4%. We are not registered with service tax. Our turn over is around 50 lakhs pa. We have recently been informed that we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would need to charge both Service tax along with Vat due to the changes in serivce tax rules. Any clarifications on this new change would be appretiated. We are also considering starting a software product line. We seek clarifications on how billing of software products is to be taxed. - Reply By V Ramanujam - The Reply = As per the recently included category of 'information technology software s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervice' effective from 16.5.08, activities such as development of software would attract Service tax. It would also attract VAT as per the relevant VAT provisions, though logically both levies cannot be made together. If you are developing software which is of customer made, then it would attract service tax and VAT, while if the software is in the nature of 'packaged software' i.e. to be sold o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ff the self, then it would attract excise duty @ 8% (and not service tax) and VAT. - Chargiability of service tax on software development - Query Started By: - Patrick Taur Dated:- 25-8-2008 Service Tax - Got 1 Reply - Service Tax - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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