Applicability of service tax on software and website development, Service Tax

[Raj Mangtani]

I am in the business of software and website development. I develop the software inhouse, but acquire the domain and web-space from other agencies. Does my work come under Service or Sales Tax?

Posts / Replies

[Surender Gupta]

If you are getting any commission from re-sale of domain or web-space, the provision of service tax may be applicable. On the other side, since the Designing Services are proposed to included, you must be careful for service tax on website development.

[Madhukar N Hiregange]

In my view till Fin Act 2007 you would not be liable as your main activityis one of software development. Section 65A sets out that in a composite service the dominant one is to be considered. Of course if you charge all composnents separately then there maybe a liability on other activties. Resale of a service in my view is not liable to servcie tax as you would be a servcie tarder and not a servcie provider. This view however requires judciial concurence