SERVICE TAX SOP FOR RETAIL SALE OF PACKAGED SOFTWARE
Packaged software for retail sales has not been brought under the Maximum Retail Price (MRP)-
based excise levy. Simultaneously, the Centre has allowed 15 per cent abatement for calculation of
excise duty on such software. The abatement is being given to cover the margins in the distribution
chain. Post the change in the basis of excise levy, the Centre has also accorded service tax exemption
on all packaged software where excise duty has been paid on MRP basis. Also, there will now be
no service tax levy on imported packaged software where countervailing duty has been paid. This will set to rest the confusion caused at the ground level by the Centre's move in 2008 to levy service tax on "transfer of right to use software".
based excise levy. Simultaneously, the Centre has allowed 15 per cent abatement for calculation of
excise duty on such software. The abatement is being given to cover the margins in the distribution
chain. Post the change in the basis of excise levy, the Centre has also accorded service tax exemption
on all packaged software where excise duty has been paid on MRP basis. Also, there will now be
no service tax levy on imported packaged software where countervailing duty has been paid. This will set to rest the confusion caused at the ground level by the Centre's move in 2008 to levy service tax on "transfer of right to use software".
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