The Central Government has issued notifications under Excise & Service Tax regarding taxability of packaged or canned software.
Excise Duty :- Notification No. 30/2010- Central Excise (N. T) dated December 21, 2010 has been issued for levy of excise duty on packaged or canned software on Retail Sale Price basis.
• Entry 93A has been inserted in Notification No. 49/2008-Central Excise (N.T), dated December 24, 2008 for Packaged software or canned software falling under Tariff Heading 8523.
• The abatement from retail sale price has been prescribed at 15%.
• Packaged or canned software has been explained to mean a software developed to meet the needs of variety of users, and which is intended for sale or capable of being sold off the shelf.
Service Tax: – As per Notification No. 53/2010- service Tax dated December 21, 2010 Service tax on providing the right to use packaged or canned software for commercial exploitation shall be exempted, subject to fulfillment of all the following conditions:
- The valuation of the said goods for the purpose of levy of Central Excise duty or Additional Customs duty, as the case may, is determined under Section 4A of the Central Excise Act 1944.
- Appropriate duty under of Excise on such value has been paid by the manufacturer, duplicator or person holding the copyright in respect of software manufactured in India. In respect of software imported into India, appropriate duty of customs including additional customs duty on such value is paid by the importer.
- A declaration has been made by the service provider on the invoice relating to such service that no amount in excess of the retail sale price declared on the said goods has been recovered from the customer.
