Classification of transactions involving the supply of antivirus ...

Case Laws     Service Tax

April 10, 2024

Classification of transactions involving the supply of antivirus software license codes/keys to end-users as either a provision of service or sale of goods. - The Tribunal concurred with the Supreme Court's view that the essence of a transaction involving canned software, which is physically transferred on media like CDs, constitutes a sale of goods rather than the provision of a service. This is because the transaction entails the transfer of right to use the software, satisfying the criteria of 'deemed sale' under the Constitution. - The Tribunal found that the adjudicating authority erred in imposing service tax on the transactions. It underscored that the appellant's distribution of software license codes/keys, which are integral to the use of antivirus software, falls within the ambit of 'deemed sale' and thus cannot be subjected to service tax.

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