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There is confusion about the applicability of taxes on the sale of packaged products such as ERP software. Prior to May 2008, only VAT was applicable. However, an Uttar Pradesh (UP) government notification created confusion and partners were advised to charge both VAT and ST. There is no clear information available. In the meantime, we have managed to charge some, but failed to collect taxes from others. How do we solve this problem?

Ajay Mian, All e Technologies

T G RAMESH — Most of us have been facing this problem. It is prevailing not only in UP but also in other states. Several associations have taken up the matter with Nasscom and the finance ministry. We can expect some positive developments once the new government is formed after the elections. In the meanwhile, this being a statutory levy, it has to be passed on to customers otherwise the liability will be on us.

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Comments
11/26/2011 5:20:33 PM
 
For any reason a finished product packed software like windows, tally ect. should not be charged with service charge because it is a product for sale with VAT. Not a service for sale. when u buy that product like any other product u get a product support for one year or so. It is correct to charge a service tax in case customer takes a service contract with software company. I thing that is what Government has to do.
 
 - Bobus Varghese,,Kerala
11/17/2010 12:04:28 AM
 
i want to gain information regarding IT through ur websites.
 
 - Sahil Jain,abc,ludhiana
8/12/2010 7:03:27 PM
 
The Licence Software / Packaged Software, are treated as a good and attracts Value Added Tax, Counter Vailing Duty and Central Sales Tax as well, but we have to check it the Rate of Tax from different states.
 
 - Venkata Narayana,Omni Infosys Solutions Pvt Ltd,Indore
10/26/2009 11:56:50 PM
 
yes, i do think that ST and VAT should apply on software selling because actually we are selling software means it is soft copy it may be CD or floppy disk, since we are selling product so, and for any software problem we also giving service to customer hence ST should be apply.
 
 - Niranjan Koyle,,Mumbai
8/8/2009 4:20:29 AM
 
Is both VAT and Service Tax applicable on the decoration / tentage / event management work?
 
 - Suresh chandra,Q Events,Noida
1
 
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