Supply of licence of pre-developed or pre-designed software amounts to supply of goods covered under heading 8523




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Supply of licence of pre-developed or pre-designed software amounts to supply of goods covered under heading 8523

Authority for Advance Rulings, Karnataka SPSS South Asia (P.) Ltd., In re – [2021] 126 taxmann.com 12 (AAR – KARNATAKA)

Short Overview:

The applicant was authorised reseller of IBM SPSS Software in India.

It was pure trader and didn’t develop or modify any software prior to selling it to a customer.

 It received software license from its principle and treated it as import of service and paid GST on reverse charge basis.

It filed an application for advance ruling to determine classification and rate of tax on supply of software license.

The Authority for Advance Ruling observed that software supplied by the applicant was a pre-developed or pre-designed software.

It was made available through the use of encryption keys and can’t be used without the aid of computer and must be loaded on computer.

Moreover, as per explanatory notes to the scheme of classification of services, limited end-user license as part of packaged software would be excluded from SAC 997331 covering licensing services for right to use computer software.

Therefore it would be classified as supply of goods covered under heading 8523.




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