Advance Ruling no : KAR_ADRG_25/2020
Author’ s Message
Under this advance ruling, the major concern of the applicant is whether the supply of computer software would be termed as supply of goods or supply of services since computer software is not defined under GST act, however one notification mentions computer software as supply of goods.
Facts of the case
M/S Solize India Technologies Pvt Ltd is engaged in the business of supplying software. The applicant purchases the software from its principal partner and supply the same to the customers which are mostly Govt departments, Public funded research institutions and public sector undertakings etc.
The principal Partner supplies the software directly to the customers by providing license keys to download online and to run the software. The software is a packaged software and not a tailor made software.
The concern of the applicant is “Computer software” is not defined in the GST act and by virtue of notification no 45/2017 -Central Tax (rate) and 45/2017- Integrated tax(rate) dated 14th November, concessional rate of 2.5% CGST and 2.5% SGST or 5% IGST, subject to the conditions mentioned in the said notification, on goods listed on said notification(including computer software) was stipulated. In the said notification ,”Computer Software” was termed as goods, for the purpose of applicability of concessional rate of GST.
Questions Involved
1. Whether software supplied by the applicant qualifies to be treated as Computer Software resulting in supply of goods?
2. Whether the benefits of Notification no 45/2017 -Central Tax (rate) and 45/2017- Integrated tax(rate) dated 14th November are applicable to the supplies made to the institutions given in the notification?
Findings and Rulings.
It was held by the Authority that since the software is not developed for any specific client and same software is sold to every client, it is agreed that the software is pre developed software and made available to clients with the help of encryption keys, it satisfies the definition of Goods.
Further the goods supplied by the applicant cannot be used without the aid of Computer, hence the goods supplied is “Computer Software” and more specifically covered under Application Software.
Further it was held that, computer software are covered in column (3) of the table present in the Notification No 45/2017. If they are sold to such recipients and sold on such conditions as mentioned in such notification, the supply of such computer software would be liable to tax 2.5% under CGST Act.
Comments