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Service tax concession on retail sale of packaged software
By siliconindia
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Tuesday, 28 December 2010, 20:19 IST
New Delhi: The Indian software industry's battle with taxes seems to get a breather. The Finance Ministry has sopped service tax on retail sale of packaged software. The tax was enforced in the budget of 2010-11.
Central excise will be continued to be charged on the maximum retail price of the software, although subsidies could be permitted as per norms. The main idea behind the tax exemption is to streamline software taxation, informed an official in the know how of service tax matters.
According to a notice issued by the Central Board of Excise and Customs, the ten percent exemption is conditional based on the payment of excise on the retail price if the software has been manufactured or imported.
The 10,000 crore Indian software industry had lobbied hard for this cause. The industry had been asking the government to categorize packaged software as goods and not as service. The packaged software, until now, were considered as both service and goods by the government.