• Am I applicable for GST and how do I pay Income tax for my services?

I'm a software license provider. I sell the license keys of the said softwares to my customers. I did not make or create these softwares. I have a turnaround of 8LPA. I'm selling these only outside India (Exports only). My payment processor is sending me tax invoices monthly.

I have the following questions.

1. Is this considered as goods or service?
2. Am I required to apply to GST?
3. How do I pay income tax for my case, I'm not registered as a Company rather an Individual
Asked 5 months ago in Income Tax

1. Services

2. After crossing threshold limit of Rs. 20 lacs. You can export without payment of taxes subject to fulfillment of certain conditions.

3. It is a income from business. You can take the benefit of presumptive taxation scheme u/s 44AD. To pay income tax, you don't need to be registered as a company.

 

 

Vivek Kumar Arora
CA, Delhi
4279 Answers
428 Consultations

5.0 on 5.0

1. It will be covered under goods.

2. GST is not required till sale reaches 40 lacs.

3. The profit on sale of licence will be included in income from business.

Ruchi Goel Anchal
CA, Gurgaon
472 Answers
5 Consultations

5.0 on 5.0

Dear Sir,

 

In your case, it is understood that you sell a pre-developed / pre - designed software. This is considered as sale of goods in GST.

Please note if a computer software is procured off-the-shelf or made available through encryption keys, then the same qualifies to be supply of goods. However, in any other case, supply of computer software is classified as supply of services under the Goods and Services Tax Act.

 

The registration limit in case of supplier of Goods is Rs. 40 Lakhs, however export are classified as inter-state supplies, and in case of inter-state supplies, compulsory registration is required, even if the turnover limit is not reached, therefore in your case, you are supposed to take registration under GST.

 

For payment of Income Tax, depending on how you classify your income your return would be accordingly filed. Tax can be paid as per normal route via online challan.

 

Please advise in case of any other clarification.

 

Thanks & Regards,

CA Aditya Dhanuka.

Aditya Dhanuka
CA, Kolkata
37 Answers
2 Consultations

5.0 on 5.0

Dear Sir,

 

You would need to pay GST through GST portal @ https://www.gst.gov.in/

& income tax payment through the portal https://www1.incometaxindiaefiling.gov.in/home or https://www.tin-nsdl.com/services/oltas/e-pay.html.

 

 

Please connect in case of any other clarification.

 

Thanks & Regards,

CA Aditya Dhanuka.

Aditya Dhanuka
CA, Kolkata
37 Answers
2 Consultations

5.0 on 5.0

- No need to pay GST as turnover is less than threshold limit. 

- For payment of income tax liability, either you can pay through tin-nsdl.com website or from incometax.gov.in.

Vivek Kumar Arora
CA, Delhi
4279 Answers
428 Consultations

5.0 on 5.0

1) Selling of license keys is goods or service is a matter of fact that needs to be determined on the basis of nature of activity actually carried out. In your case, it appears to be a service only. You may also go through the list of codes published by GST and Income Tax Department and identify the appropriate code applicable to you. 

2) You need to get registered for GST.

3) If you have raised invoices in your name, then its your income. So is the case, even if you used a trade name for raising the invoice. The income needs to be offered as income from business or profession. You may also have to check for the applicability of presumptive taxation u/s 44AD or 44ADA. 

You need to pay income tax based upon your slabs. 

You can pay your tax online or offline through your bank, if your bank offers services for payment of taxes.

B Vijaya Kumar
CA, Hyderabad
943 Answers
103 Consultations

5.0 on 5.0

Hi,

As per a Ruling of Authority of Advance Ruling of Karnataka software license of pre-packaged software is goods.

Therefore since you are exporting goods you need to apply for GST irrespective of turnover. 

You will also have to apply for LUT to export without GST.

As far as Income tax is concerned if you are carrying on business as individual then you will have to pay taxes in your individual capacity.

 

Hope this helps

Regards

Altamush

Altamush Zafar
CA, Kanpur
21 Answers

5.0 on 5.0

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