India's Finance Ministry is to meet representatives of the packaged software industry to settle the issue of double- taxation on the sector, reports PTI, quoting a Finance Ministry official. He said that the representatives would put forth their suggestions and the ministry would work out a solution.
The software industry is under pressure due to rising costs, partly because of double-taxation--service tax as a service and excise duty as a good. The government feels that there should be only one federal tax levied on a good or service, the official said. But when software is downloaded, it attracts service tax with downloading treated as a service and faces duty when a licence for the software is obtained, as it is a good.
Vinnie Mehta of the Manufacturers Association of Information Technology (MAIT) said that in all there would be three taxes, the service tax, excise duty at Union level and state taxes like VAT,which have to be paid by manufacturers. Packaged software refers to a bunch of software offered to various PC marketing companies to come pre-loaded on branded computers.
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