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TMI Blog2015 (9) TMI 738X X X X Extracts X X X X X X X X Extracts X X X X ..... n fees which is calculated for 2500 man days of customized efforts. Separate fee is also charged for core team education fee. This training fee includes the charges for two executive appreciation programme and one audit training. Professional services outside the scope of the agreed implementation can also be availed by the customer as per the assessee's professional services mentioned in the agreement. It is stated that, before pilot implementation programme commences, there should be installation of software. Therefore, the implementation of programme starts only after the installation of software which is the goods which is transferred under the agreement i.e., the customized copyrighted article 'finacle' of the assessee. As only after the supply of packaged and customized software, service is required to integrate the system to make the software functional or useable under the contract if that function is also entrusted to the assessee, the assessee renders services for implementation of the project. It is in the nature of post sale activity. As there is no transfer of any goods at the time of implementation of the project, there is no direct sale or deemed sale. It is in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mplementation, customization and other support services in respect of software as ultra vires Articles 246 and 265 of the Constitution of India; or (c) in the alternative, to declare that Section 65 (105) (zzzze) of the Finance Act, 1994, to the extent it seeks to levy service tax on implementation, customization and other support services, if treated as a sale, as being ultra vires Articles 246 and 265 read with Entry 97 of List I of the Seventh Schedule to the Constitution; and (d) for a direction to respondent Nos. 4 and 5 to refund the entire service tax paid by and collected from the petitioner and other consequential reliefs. Though in the Writ Petition they have challenged the validity of Section 3 of the KVAT Act as well as Section 66 read with Section 65 (105)(zzzze) of the Finance Act, 1994, no arguments were addressed on the constitutional validity of the said provisions. Therefore, it is not considered. FACTS IN BRIEF: 2. The assessee is a Company incorporated under the provisions of the Companies Act, 1956 and is engaged in the business of development and sale of information technology related services like customization of software, implementation of so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le from the petitioner and thereafter has the option to engage anybody for its implementation. Therefore, the sale of Finacle and its implementation are two different and independent activities and cannot be clubbed together. Many a time, the customer chooses the petitioner to provide the services of implementation. In such a case, the petitioner enters into separate agreements - one for sale of Finacle and the other for provision of implementation services. Where the implementation is undertaken by the petitioner, the petitioner sets up a project implementation team comprising of both the petitioner's employees as well as customers' employees. The project implementation team ensures that Finacle is integrated into the customers' IT environment. The process of implementation does not entail development of any new software or upgradation of the existing software. 5. Apart from the above activity of development and sale of its own software and services, the petitioner also purchases and sells third-party software and provides implementation and other support services for such thirdparty software. The petitioner also provides annual technical support services which may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o force of the KVAT Act, with effect from 01-04-2005, no issue was raised by the Revenue. In fact, the Assistant Commissioner of Commercial Taxes (Audit-4), LDU Division, Bangalore, examined the books of accounts and the activities of the petitioner in detail and with particular focus on implementation services, claimed as exempt by the petitioner, and passed two orders dated 23-02-2007 under Section 38(1) of the KVAT Act for the tax periods June 2005 to March 2006 and April 2006 to December 2006 respectively. In the said orders, the ACCT (LDU) discussed in detail the implementation services provided by the petitioner and accepted that the said activity is a pure service without any element of sale or transfer of property in goods and consciously allowed the exemption claimed by the petitioner on the turnover relatable thereto. 9. It is thereafter for the first time, on 13-03-2009, the Assistant Commissioner of Commercial Taxes (Enforcement- 7), South Zone, Bangalore, visited the petitioner's place of business and thereafter issued a notice dated 17-04-2009 under Section 52 of the KVAT Act contending that the sale of Finacle by the petitioner is nothing but a sale of softwar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, the petitioner filed appeal before the Tribunal. The Tribunal, after hearing the parties, partly allowed the appeals filed by the petitioner. It held that sale of Finacle is a case of sale of software and not sale of software licence as contended by the revenue and, therefore, the authority was wrong in levying higher rate of tax. It further held that implementation service does not involve any transfer of property in goods and, therefore, not liable to tax under the KVAT Act. The Tribunal followed its earlier judgment rendered in the case of IBM India Private Limited. At that stage, the request of the State that they should be given an opportunity to examine the implementation service agreements was acceded to and the Tribunal remanded the matter back to the assessing authority as they were passing an order of remand on the question of disallowance of input tax credit. The assessing authority was directed to examine the issue strictly in light of its earlier judgment in the case of IBM India Private Limited. Thereafter, notice came to be issued under Section 39 of the KVAT Act and Section 9(2) of the CST Act. The petitioner filed its objections to the notice. After hearing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h goods and services, it is in the nature of a Works contract. Assessee has discharged VAT liability in respect of the said goods sold under this contract in the capacity of Works Contract. In the course of the works contract, if any, up-gradation, enhancement is done, the copyright vests with the assessee. The customer is only entitled to the right to use the said software. 12. If the packaged customized software is delivered to the customer, the customer has option of utilizing the service of the assessee or any other person in the field for implementation of the contract. What is required in the said implementation is to evaluate the skill to integrate several other softwares including finacle- the software belonging to the assessee, the right to use of which is transferred. It is not a pre-sale activity, it is a post-sale activity. Clause 3 of the agreement makes this position clear. At the time of implementation of the contract, there is no transfer of any goods. Even in that process if any software emerges the said software ownership vests with the customer. Therefore, there is no transfer of right to use as the customer owns the said software. Therefore, it is a contract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Section 2(12), 'goods' defined in Section 2(15), and 'turnover' mentioned in Section 2(36). According to him it is the transactional value which has to be taken note of and all the components of transactional value should be considered as sale consideration and it should be subjected to tax under VAT. In fact customization involves service. It is only after the service is rendered, it becomes a customized product i.e., goods which is marketable, usable, functionable and therefore, transferable, whereas the service rendered is immaterial and therefore, he submits that unless the goods are customized it is not usable and therefore, the consideration paid for customization is subject to VAT. Whether the assessee calls it as implementation of the contract or customization or improved enhancement, it is immaterial. It is the substance of the contract, which has to be taken note of and, therefore, he submits that the order passed by the Assessing Authority is in accordance with law and does not call for any interference. 14. Sri. G. Rajagopalan, the learned Senior counsel appearing for Union of India submitted that while considering what constitutes goods the defin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sable, does it amount to pre-sale activity which is chargeable to VAT or is it a post sale activity, which is in the nature of service simplicitor? POINT No.1: 16. The learned counsel appearing for the parties relied upon several judgments of the Apex Court as well as this Court in support of their respective contentions. The law relating to taxability of software is now fairly well settled. 17. The Constitution Bench of the Apex Court in the case of TATA CONSULTANCY SERVICES VS. STATE OF A.P. reported in (2005) 1 SCC 308 has held as under:- 19. Thus this Court has held that the term goods , for the purpose of sales tax, cannot be given a narrow meaning. It has been held that properties which are capable of being abstracted, consumed and used and/or transmitted, transferred, delivered, stored or possessed, etc., are goods for the purposes of sales tax. The submission of Mr. Sorabjee that this authority is not of any assistance as a software is different from electricity and that software is intellectual incorporeal property whereas electricity is not, cannot be accepted. In India the test to determine whether a property is goods , for purposes of sales tax, is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... advice, which are paid for and used. The foreign collaborators part with them in lieu of money. It is, therefore, sold by them as chattel for use by the Indian importer. The drawings, designs, manuals etc. so received are goods on which customs duty could be levied. 34. The decision of Winter v. Putnam case (938 F 2nd 1033 (9th Cir 1991) is also of no help to the appellants as in that case it was the quality of information regarding mushrooms which was not regarded as a product even though the encyclopaedia containing the information was regarded as goods. Here we are not concerned with the quality of information given to the appellants. The question is whether the papers or diskettes etc. containing advice and/or information are goods for the purpose of the Customs Act. The answer, in our view, is in the affirmative. 41. Significantly Chapter 49 also includes items which have substantial intellectual value as opposed to the value of the paper on which it is put. Newspapers, periodicals, journals, dictionaries etc. are to be found in Chapter 49 wherein maps, plans and other similar items are also included, while Chapter 97 talks about original engravings. It is clear that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t when technical material is supplied whether in the form of drawings or manuals the same are goods liable to customs duty on the transaction value in respect thereof. 44. It is a misconception to contend that what is being taxed is intellectual input. What is being taxed under the Customs Act read with the Customs Tariff Act and the Customs Valuation Rules is not the input alone but goods whose value has been enhanced by the said inputs. The final product at the time of import is either the magazine or the encyclopaedia or the engineering drawings as the case may be. There is no scope for splitting the engineering drawing or the encyclopaedia into intellectual input on the one hand and the paper on which it is scribed on the other. For example, paintings are also to be taxed. Valuable paintings are worth millions. A painting or a portrait may be specially commissioned or an article may be tailor-made. This aspect is irrelevant since what is taxed is the final product as defined and it will be an absurdity to contend that the value for the purposes of duty ought to be the cost of the canvas and the oil paint even though the composite product, i.e., the painting, is worth milli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... program is defective, in my opinion there would prima facie be a breach of the terms as to quality and fitness for purpose implied by the 1979 Act or the 1982 Act. 48. In Advent Systems Ltd. v. Unisys Corpn. (925 F 2d 670 (3d Cir 1991)) it was contended before the Court in the United States that software referred to in the agreement between the parties was a product and not a good but intellectual property outside the ambit of the Uniform Commercial Code. In the said Code, goods were defined as all things (including specially manufactured goods) which are moveable at the time of the identification for sale . Holding that computer software was a good the Court held as follows : Computer programs are the product of an intellectual process, but once implanted in a medium they are widely distributed to computer owners. An analogy can be drawn to a compact-disc recording of an orchestral rendition. The music is produced by the artistry of musicians and in itself is not a 'good', but when transferred to a laserreadable disc it becomes a readily merchantable commodity. Similarly, when a professor delivers a lecture, it is not a good, but, when transcribed as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Court has itself clarified as follows: 85[86]. We, however, place on record that we have not applied our mind as regard the larger question as to whether the informations contained in a software would be tangible personal property or not or whether preparation of such software would amount to manufacture under different statues. 18. Thereafter, explaining the word 'goods' in Article 366(12) of the Constitution, the Apex Court has held as under : - 27. In our view, the term 'goods' as used in article 366 (12) of the Constitution of India and as defined under the said Act are very wide and include all types of movable properties, whether those properties be tangible or intangible. We are in complete agreement with the observations made by this Court in Associated Cement Companies Ltd. (2001) 4 SCC 593. A software programme may consist of various commands which enable the computer to perform a designated task. The copyright in that programme may remain with the originator of the programme. But the moment copies are made and marketed, it becomes goods, which are susceptible to sale tax. Even intellectual property, once it is put on to a media, whether i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls with levy of tax on software under the KST Act, 1957 and KVAT Act, 2003. The said circular is issued for the benefit of the dealers and developers of software and the departmental officers because of the confusion created. It reads as under:- CIRCULAR NO.17/06-07 No.KSA.CR.76/05-06, Bangalore, dated 24-7-2006 Sub: Levy of tax on software under the KST Act, 1957 and KVAT Act, 2003-Reg. It has been brought to the notice of this office that there is confusion with regard to levy of tax on transactions relating to computer software. 2. The matter is examined and it is considered necessary that the transactions be analysed for the benefit of the dealers and developers of software and the departmental officers in expeditious assessment and recovery of tax on these transactions. (1) Software is goods for the purpose of levy of tax under the provisions of the KST Act, 1957 and the KVAT Act, 2003. The sale of transfer of property in software for consideration that would be liable to tax, could be a direct sale or a deemed sale. (2) Direct sale of software would ordinarily be that transaction in which software is sold to the purchaser in a deliverabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count. Such deemed sale may also include a transaction in which the seller integrates his software with a software belonging to the purchaser either as a part of a contract for maintaining, repairing, upgrading or improving software or any device embedded with software entered into between the seller and the buyer. As pointed out earlier, such integration leading to transfer of property in software from the seller to the buyer for a consideration may happen at the seller's premises or the buyer's premises. In all such cases of deemed sale of software or transfer of property in software in the execution of a works contract (by whatever name called), the seller would be liable to claim deduction from his taxable turnover amounts towards labour charges and other like charges not involving any transfer of property in goods actually incurred in connection with the execution of such works contract under the provisions of Rule 6(4) of the KST Rules, 1957 and Rule 3(2) of the KVAT Rules, 2005. (4) The third kind of transactions are the ones that would not involve any transfer of property in software (either as a part of a deemed sale or as a result of other sale), but which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per the provisions of the KST Act, 1957 or the KVAT Act, 2003 and the rules made thereunder to assess and recover tax due . 21. The aforesaid circular recognizes three types of transactions. Firstly, direct sale of software in which software is sold to the purchaser in a deliverable state through an appropriate media - floppy, C.D. etc., In this type of transaction, the copyright or the intellectual property relating to the software sold vest with the seller. The position would be the same even in respect of software where some modification or change is made to the software sold. The same is generally called as customization in software sector. The fact whether any such customization is done at the seller's premises or the purchaser's premises would not be of any relevance. The copyright or the intellectual property rights of such modification also vests with the seller. 22. In the case of deemed sale or transfer of property in software in the execution of a works contract, the seller would be liable to claim deduction from his taxable turnover amounts towards labour charges and other like charges not involving any transfer of property in goods actually incurred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are belongs to the customer, as it is developed, and the developer of the software does not retain any copyright in such software. In such a situation, since there is no transfer of property in goods and what is provided is only a pure service, there can be no liability to VAT. The consideration in such cases is liable only to service tax. 26. In the case of Annual Technical Support (ATS), if the agreement of the contract includes the annual maintenance involving both service and issuing upgraded or enhanced software, then such a contract is a combination of both goods and service. The contract is in the nature of works contract. VAT is liable to be paid on the goods part and service tax is to be paid on the labour aspect. In upgradation and enhancement, the copyright is owned by the developer of software and what is transferred to the customer is the right to use. 27. In the case of implementation of customized software, where the copyright of the customized software is with the software developer, the implementation process is a pure service rendition and does not involve any transfer of property. If any source coding or scripting is done during the process of implementatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... match the clients' requirements. * Enhancement - Customer requirements are not there in the software and also cannot be customized but may be made available in the next version of the software * Alternative available - Customer requirements may be met alternative feature with all the relevant information. * Unavailable - Totally not available. 31. It also states the various aspects involved in the customization activities of the 'Finacle' product. They can be broadly classified as under:- a. Reports (formatting to the data) b. Scripting (Functional customization) c. Configuration (parameters) d. ONS customization (Screens) e. Identification of product enhancements 32. After the customization is over and the finacle software which meets the requirement of the customer is sold, starts the implementation phase. The said implementation phase includes (a) Training (b) Requirement Study (c) Transfer of data. 33. Therefore, a case study was made in the case of UCO Bank project and it is stated as under:- 2) Once the 'RFP' is evaluated and approved the software product 'F' is directly billed to end customer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... records. The 2nd type of contract is only contract of supply of customized products and ATS contract, without contract of implementation. An example of such contract is the assessee's contract with UCO Bank, which was discussed above. Therefore, in order to find out what the intention of the parties the entire contract is to be read as a whole. Terms have to be looked into and then only we can find out how the parties have given effect to the terms of the contract. 36. In this background, we have to find out the nature of the transaction in the instant case. We have already examined above the contract with UCO Bank and noticed how implementation is not part of the said contract. The implementation agreement was with M/s Hewlett Packard India Sale (P) Limited. Now, let us examine the contract entered into by the assessee with Federal Bank, which was also examined by the Assessing Authority in the impugned order. Annexure I is the software which is licensed to the customer. The said Annexure-I reads as under:- Annexure I - Software 1.1 Licensing Terms Fees Sl. No. Product/Modules Licensing Terms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the contract for supply of software with Federal Bank also. 38. Annexure - I does not include the implementation. Annexure-I makes it clear that ATS will commence from the date of the first branch GO-LIVE. It is in this context Article 2 speaks about title. Article 2 of the agreement which deals with TITLE makes it clear that INFOSYS and Third Party Vendors shall at all times retain all title, copyright, and other proprietary rights in Software and Third Party Software respectively, any Enhancements, upgrades, maintenance releases etc. thereto and translations thereof and Bank does not acquire any rights in the same other than those specified in this Agreement. Subject to the Bank paying the required license fee and observing all terms of the Agreement, INFOSYS grants to the BANK a non exclusive, perpetual, non transferable, limited license to use the Software. 39. Therefore, from the aforesaid clause it is clear at all times, the assessee has retained copyright and several proprietary rights in software and what is transferred is a non-exclusive, perpetual, non- transferable limited license to use the software. 40. The material on record discloses that finacle software, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the parties, and the intellectual property rights for which are owned by Infosys. 42. Clause 5 of the agreement speaks about the technical support . It provides that the scope of technical support includes : A. HelpDesk Technical assistance on Software and if agreed, on Third Party Software through Telephone/Facsimile/E-mail for Problem solving and trouble shooting, Rectification of any bugs reported B. Upgrades and Maintenance releases of Software and if agreed, Third Party Software, excluding separately Priced/optional products or modules for which BANK has not purchased any rights. 43. Upgrades have been defined to mean subsequent improved versions and releases of Software or Third Party Software as the case may be, which may be provided in accordance with the terms mutually agreed to between the parties, and which are generally made available to customers covered under ATS at no additional charge. Upgrades may include Software Trouble Reports (STR) fixed and Software Enhancements incorporated. 44. It also provides certain exclusions: Any on-site support, whether for Software or Third party Software will be outside the scope of this clause. Any such on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for a team of up to 25 members of BANK's core team Installation of Software at the Data Centre The pilot implementation phase shall be deemed to be complete when Software shall Go Live in Data Centre and 15 number of branches. BANK will be responsible for: Job Cards and Process Manuals preparation. Providing inputs for Parameterization. Data extraction from the current system. Systems Integration Testing (SIT) and Simulation Run. INFOSYS will assist in the same. End user training Infrastructure readiness Program management 3. Core Team Education Scope of Core Team Education: Training for the BANK's Core Team on the licensed Software as per Annexure1 Core team education will be done for 1 batch. Size of the batch shall not be more than 25 people. The Training will be conducted at INFOSYS facilities in Bangalore During core team training at Bangalore, traveling, lodging and boarding expenses of BANK officials will have to be borne by BANK. 4. PILOT IMPLEMENTATION FEES Pilot Implementation Fess for Finacle Core Banking will be INR 220,00,000/- (two crore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s beyond the pilot phase implementation. The boarding and other expenses will be charged for the total duration of the INFOSYS Engineer/Consulant/Project Manager's stay at the Bank's site including non-working days during that stay. 3. Detailed scope of work for the services to be provided by Infosys shall be detailed out in a statement of work which shall be agreed between the parties. 4. Termination Following termination of the Agreement or this Annexure by either Party, BANK shall pay to INFOSYS charges for all Services provided to the BANK up to the date of termination. 47. Therefore, all the required responsibilities of the assessee is clearly set out. It includes Project management of the pilot project, initial systems study to understand Bank's requirements, core team education for a team of up to 25 members of bank's core team and installation of software at the Data Centre. The pilot implementation phase shall be deemed to be complete when software shall Go Live in Data Centre and 15 number of branches. Article 3 deals with Core Team Education which includes training for the bank's core team on the licensed software as per Annexure-I, cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39; as defined in the agreement is outside the scope of parameterization. In other words, in the process of integration and making the system workable, if it becomes necessary to script/write a code, it would be client specific and it also amounts to customization. But this customization which is defined under the agreement means modifications done outside the source code of software or the third party software using the customization or extensibility infrastructure provided by software or third party software which are outside the scope of software and the right to reuse and/or incorporate into software or third party software such customizations is retained by the assessee but the ownership of the said software vests with the customer. Therefore, it is clear, in substance implementation means the customized software is integrated into several other systems so that the bank can start using the licensed software. In the process, there is no transfer of any goods or right to use any goods, what is rendered is service and therefore, the said consideration paid as service charges is not subjected to VAT but subjected to service tax. POINT No. 2:- 48. The argument is that implem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clauses in the agreement, it was held that the assessee though issues tax invoice for the sale of finacle software, only customized finacle software is delivered to the client and hence, the splitting up of a single activity into divisible activity i.e., one for sale and the other for service/customization is not correct and, therefore, proceeded to hold that the implementation of the project is a pre-sale process and it is subjected to VAT. The aforesaid factual finding recorded is contrary to the material on record. 52. The understanding of the authorities is that the assessee has developed a software viz., 'Finacle software' which is a basic software relating to banking activities and is the copyright holder for the same. Whenever customer namely a bank approaches the assessee to develop software for their business activities, the assessee will take steps to develop the said software as per the requirement of the customers. In this activity, the assessee will make changes to the finacle software held by it by customizing the same to the requirement of the customers and will deliver the improved/modified version of the finacle software to them. Here, what is transferr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the installed software starts functioning. The terms of the agreement makes it clear that it is not obligatory for the bank/customer to have the services rendered only by the assessee as a part of contract of sale or a condition of sale. It is open to the customers to have the services rendered by any other competent agency. Therefore, the Assessing Authority has misconstrued this implementation to that of customization of the software and erred in holding that the customization involves transfer of goods and the assessee cannot avoid payment of VAT by describing the same as implementation. 55. Whether any charges collected by the seller towards such modification or change, generally called as customization in software sector, is a post sale or pre-sale expenditure would depend on the agreement/contract between the seller and the buyer, and on the actual conduct of the parties concerned as indicated by the relevant documents and books of account. The fact whether any such customization is done at the seller's premises or the purchaser's premises would not be of any relevance to determine this aspect. Similarly, whether such charges were collected in lump sum or on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hough there is one composite contract, it is in different parts - one part deals with the contract of sale of customized software and another deals with the services to be rendered for implementation. Yet another agreement speaks about the technical service which is in the nature of a works contract. The assessee has paid VAT on the contract for sale of customized software. The assessee has also paid VAT in respect of the goods aspect in the works contract. Whereas the service contract does not involve sale of goods nor it is exclusively a contract for sale of goods but on the contrary it is an exclusive contract for rendering service. 58. That apart 'goods' has been defined under the Constitution at Article 366(12). The State legislature has defined 'goods' in the VAT Act at Section 2(15). While dealing with the levy of tax it is the definition given in the Constitution which has to be taken note of and whatever may be the definition in the State legislation, it has to yield to the definition in the Constitution and, therefore, any attempt on the part of the State to bring the transaction in question under the definition of the goods as defined in the VAT Act ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s treated as works contract, as the works contract necessarily involves an agreement to render service and an agreement for sale of goods, service aspect could be taxed by the Parliament and the sale of goods aspect could be taxed by the State Legislature. But, this distinctiveness of two transactions is to be ascertainable from the terms of the composite contract. If such an intention is not discernible from the terms of the contract then we have to find out what is the pith and substance of the contract or in other words what is the true nature and character of the contract. If on an examination of the contract as a whole, it is not possible to discern that the contract involves sale of goods but is essentially an agreement to render service, neither the concept of a works contract nor the concept of aspect theory is attracted. 60. In view of the aforesaid legal position well enunciated, the contract for implementation, which is nothing but a service contract, is not liable to VAT. In view of the provisions contained in the Finance Act, 1994, 'contract' for implementation specifically falls within the definition of service and is taxed, as such, under the said law. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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