TMI BlogServices related to Information Technology SoftwareX X X X Extracts X X X X X X X X Extracts X X X X ..... s of a computer or an automatic data processing machine or any other device or equipment. Analysis: It is important to know here that the same definition of information technology software already exists in Central Excise Tariff Act and excise duty is levied on this item. The intention of the service tax law is not to tax such items which are already liable to tax under excise law. The main distinction is that service tax is applicable on services related to information technology software while excise duty is applicable on sealed packed software which are sold in packed form. Customised software is not liable to excise duty if it is not in a packed or canned form. Same in the case software is developed and it is downloaded thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this entry? Yes. On site development of software is covered under the category of development of information technology software. 6.4.3 Would providing advice, consultancy and assistance on matters relating to information technology software be chargeable to service tax? These services may not be covered under the declared list entry relating to information technology software. However, such activities when carried out by a person for another for consideration would fall within the definition of service and hence chargeable to service tax if other requirements of taxability are satisfied. 6.4.4 Would providing a license to use pre-packaged software be a taxable service? The following position of law needs to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te or disc or CD. Thus a transaction sale of computer software is clearly a sale of goods within the meaning of the term as defined in the said Act. The term all materials, articles and commodities includes both tangible and intangible/incorporeal property which is capable of abstraction, consumption and use and which can be transmitted, transferred, delivered, stored, possessed etc. The software programmes have all these attributes. Therefore, in case a pre-packaged or canned software or shrink wrapped software is sold then the transaction would be in the nature of sale of goods and no service tax would be leviable. The judgement of the Supreme Court in Tata Consultancy Service case is applicable in case the pre-packaged software ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecified in clause (f) of section 66E. Therefore, if a pre-packaged or canned software is not sold but is transferred under a license to use such software, the terms and conditions of the license to use such software would have to be seen to come to the conclusion as to whether the license to use packaged software involves transfer of right to use such software in the sense the phrase has been used in sub-clause (d) of article 366(29A) of the Constitution. (See point no 5.6.1). In case a license to use pre-packaged software imposes restrictions on the usage of such licenses, which interfere with the free enjoyment of the software, then such license would not result in transfer of right to use the software within the meaning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fall in this declared entry or would it be covered by the TCS Judgement? In such a case although the software is finally delivered in the form of goods, since the contract is essentially for design and development of software it would fall in the declared list entry. Such a transaction would be in the nature of composite transaction involving an element of provision of service, in as much as the contract is for design and development of software and also an element of transfer of title in goods, in as much as the property in CD containing the developed software is transferred to the client. However, the CD remains only a media to transmit or deliver the outcome of which is essentially and pre-dominantly a contract of service. There ..... X X X X Extracts X X X X X X X X Extracts X X X X
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