TMI Blog2021 (4) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... nce the supply made by the applicant is covered under Supply of goods and the said supply is covered under tariff heading 8523. The Notification No.45/2017- Central Tax (Rate) dated 14.11.2017 and Notification No. 47/2017-Integrated Tax (Rate) dated 14.11.2017 stipulates the rate of CGST / IGST @ 5%, if the goods of computer software is supplied to public funded research institutions subject to fulfillment of the conditions prescribed under column 4 of the said notification. In the instant case the applicant is supplying computer software to National Institute of Science Education and Research, Bhubaneswar, a public funded research institution, under the administrative control of Department of Atomic Energy (DAE), Government of India. Further the said institute has also furnished a certificate as required to fulfill the required condition. - KAR ADRG 15/2021 - - - Dated:- 24-3-2021 - DR. M.P. RAVI PRASAD AND SRI. MASHHOOD UR REHMAN FAROOQUI, MEMBER Represented by : Sri. Tushar Jalan, GSTP Authorized Representative ORDER UNDER SECTION 98(4) OF THE CGST ACT, 2017 UNDER SECTION 98(4) OF THE KGST ACT, 2017 M/S. SPSS South Asia Private Limited, #2353/1-4, &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice and GST is paid on reverse charge basis accordingly. 5.5 The Applicant provides a download link to the software that provides the software license code to its customer. 5.6 The applicant also provides a physical backup CD containing the software. The Backup copy of software is for Customers convenience only. At certain times due fluctuation in bandwidth or any other technical reason, customers face difficulties in downloading the software and in that case, they can use the CD provided. Furthermore, in Government Institutions and certain institutions, they prefer a CD for Inventory record purpose. 5.7 The Applicant has stated that they are currently billing the software under the HSN code 997331. 6. Applicant's interpretation of Law: 6.1 The Applicant stated that the Ministry of Finance vide Notification No.45/2017-Central Tax (Rate) and Notification No. 47/2017-Integrated Tax (Rate) dated 14th November 2017 has provided for a reduced rate of tax when certain supplies are made to various public funded scientific and research institutions. 6.2 Further, the following explanation to the above mentioned notifications, gives meaning to Public funded researc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should fall under the above-mentioned definition and therefore should be a supply of services. Accordingly, the Applicant is supplying such software licenses under HSN code 997331. 6.7 The Applicant has mentioned that as per Sectoral FAQs, in terms of Schedule II of the CGST Act 2017, development, design, programming, customisation, adaptation, upgradation, enhancement, implementation of information technology software and temporary transfer or permitting the use or enjoyment of any intellectual property right are treated as services. But, if a pre-developed or pre-designed software is supplied in any medium/storage (commonly bought off-the-shelf) or made available through the use of encryption keys, the same is treated as a supply of goods classifiable under heading 8523. Thus, the Applicant has stated that sale of software licenses through the medium of the internet should be a supply of services. Therefore, if a strict interpretation of the word Goods (as used in the notification) is used, a software license may not qualify as it should be classified as a supply of services and therefore such supplies of software licenses may be out of the ambit of the above-mentioned n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such as computer software, Compact Disc-Read Only Memory (CD-ROM), recorded magnetic tapes, microfilms, microfiches supplied to 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. 11. The applicant admits that their supply of software licence 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 and hence they adopted the classification SAC 997331 while supplying the said software licenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 case, certifying that the said go ..... 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