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3.4. The provisions of Section 65(105)(zzzze) uses the expression providing the right to use information technology software for commercial exploitation including right to reproduce, distribute and sell information technology software and right to use software components for the creation of and inclusion in other information technology software products and providing the right to use information technology software supplied electronically.

3.5. The canned software or packaged software is capable of being marketed and sold off the shelf in a standardised form and therefore is excisable goods. The service element is discernible clearly in the customised software which is liable for service tax. Providing 'right to use' is a service and is liable to service tax within the ambit of constitutional mandate and residual powers of taxation. In any case, each transaction should be considered individually to find out as to whether it is a sale or service and the writ petitions are premature, as no action is taken in terms of the amended provision.

(i) development of information technology software,
(ii) study, analysis, design and programming of information technology software,
(iii) adaptation, upgradation, enhancement, implementation and other similar services related to information technology software,
(iv) providing advice, consultancy and assistance on matters related to information technology software, including conducting feasibility studies on implementation of a system, specifications for a database design, guidance and assistance during the startup phase of a new system, specifications to secure a database, advice on proprietary information technology software.
(v) acquiring the right to use information technology software for commercial exploitation including right to reproduce, distribute and sell information technology software and right to use software components for the creation of and inclusion in other information technology software products.
(vi) acquiring the right to use information technology software supplied electronically."

6. Amendment Act No.2 of 2009 to the Finance Act, 1994: List I of Schedule VII contains certain specific entries, where the Parliament would be competent to enact law for imposition of taxes. Some of the entries are Entry Nos.82, 85, 86, 89, 90, 92 as stood when the Constitution was framed and brought in. By the Constitution (Sixth Amendment) Act, 1956, Entry 92-A was introduced with effect from 11.6.56, which confers power on the Parliament to enact law in respect of taxes on the sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter-State trade or commerce. By the Constitution (Forty-Sixth Amendment) Act, 1982, taxes on the consignment of goods (whether the consignment is to the person making it or to any other person), where such consignment takes place in the course of inter-State trade or commerce was introduced with effect from 2.2.83. By the Constitution (Eighty-eighth Amendment) Act, 2003, Entry 92-C was introduced for taxes on services. Though the Amendment Bill was passed in both the Houses of Parliament, it was not given effect to. Entry 97 is a residual entry, which empowers the Parliament to enact law in respect of any other matter not enumerated in List II or List III including any tax not mentioned in any of those lists.

21. Paragraph 4907 00 30 refers to documents of title conveying the right to use information technology software and attracts 10% customs duty. Serial No.157 of Notification 21/2002 refers to Chapter 49 as well as 8523 and provides for an exemption from basic customs duty in respect of (i) information technology software and (ii) document of title conveying the right to use information technology software. The Explanation to the Entry defines 'Information Technology Software' to mean any representation of instructions, data, sound or image including source code and object code, recorded in a machine readable form and capable of being manipulated or providing interactivity to a user, by means of an automatic data processing machine.