Associations unite to resolve software issue

Post the government of India's stance to charge additional service tax on
software licenses, associations across the country have united to take legal
recourse on the issue. While some have already made an effort to approach the
various tax depart­ments, others are planning to move to court. Besides, many of
the associa­tions have directed their members not to bill and purchase material,
till the issue is resolved.

Saket Kapur, Secretary, Progressive Channel Association of IT (PCAIT) stated,
“We are planning to write a letter to the Finance Minister about the current
scenario. We will also apprise him that following this move, software will
become unaffordable and consequently encourage piracy further.”

In Chennai, Sudarsan Ranganathan, CEO of Veeras Infotek is taking the lead in
raising the issue along with other dealers in the region. The dealer community
in Chennai is plan­ning to meet the IT department to clarify the tax deducted at
source (TDS) portion and the service tax department to understand the
implications of service tax being levied on software licenses.

Mumbai-based Trade Associa­tion of IT (TAIT) has met with officials at the
sales tax depart­ment and legal consultants to resolve the issue. “While we are
seeking clarity from the sales tax department on the VAT front, we are awaiting
advice from tax consultants on the service tax front. Besides this we are also
taking up the issue proactively with Nasscom and Manufac­turers' Association for
IT (MAIT). However, while some of the dealers have stopped billing and taking
orders others who already have orders in hand have not stalled the billing but
are charging both VAT and service tax on the software licenses,” said Chetan
Shah, Secretary, TAIT.