Software developed as per customer’s specifications are liable to service tax

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CESTAT, MUMBAI BENCH

3i Infotech Ltd.

v.

Commissioner of Service Tax, Mumbai-II

Order Nos. S/78/2013/CSTB/C-I & A/29/2013/CSTB/C-I
Application No. ST/STAY/828 OF 2012
Appeal No. ST/232 OF 2012

Date of Pronouncement- 14.01.2013

 

From the impugned order, it does not come out clearly how the service tax liability has been computed. If the appellant has purchased from third parties and sold the same on payment of VAT and also supplied hardware on payment of VAT, the same would not be liable to service tax. The liability to service tax would arise only in respect of software which the appellant has developed as per customer’s specifications and supplied to their customers. Therefore, there is a need to go through the agreements entered into with the clients, bills raised for the services rendered and the goods supplied and the payments made towards service tax liability under the category of “information technology service”. Only after going through all these documents, correct service tax determination can be done. Accordingly, we remand the matter back to the adjudicating authority to consider the matter fresh after taking into account all the documentary evidences which the appellant would submit in support of their claim that they have discharged the service tax liability correctly. The appellant is directed to cooperate with the department and produce all the documentary evidences by way of sales invoices, contracts/agreements entered into with the clients and other necessary documents, and payment of service tax made in respect of the services rendered by them etc.