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Is both VAT and ST applicable on the sale of software?

Created by : Manoj Parida, STE-2, Microsoft India (RD)  | 07 20 2010 17:21:04 +0000
Industry : IT ProductsFunctional Area : Business Policy(Strategy & Execution)
Keywords : st vat
Activity:  123 views;  last activity : 07 20 2010 17:23:00 +0000

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.

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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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.
By Manoj Parida, STE-2, Microsoft India (RD)  | 07 20 2010 17:21:04 +0000
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