Sale of software is taxable: Supreme Court
Monday, 08 November 2004, 20:30 IST
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NEW DELHI: The Supreme Court ruled Friday that tax can be levied on software programmes that are sold off the shelf. With the ruling, state governments can now levy sales tax on popular programmes like Oracle, Lotus, Unigraphics and many others whose sales run into millions of rupees every year. A five-judge constitution bench headed by N. Santosh Hegde gave this ruling on a special leave petition filed by the Tata Consultancy Services (TCS). The petition, filed in 1996, had challenged an Andhra Pradesh High Court judgement that upheld the state government's levy of sales tax on TCS's software programmes sold off the shelf. The bench said the term "goods", as defined in the constitution and the Andhra Pradesh General Sales Tax Act, included all types of movable property - whether tangible or intangible. According to the ruling, "The copyright in that (software) programme may remain with the originator of the programme but the moment copies are made and marketed, it becomes goods, which are susceptible to sales tax."
Source: IANS
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