Does Software companies applicable for TIN Registration ?

I am a individual developer and own a small level software development consultancy. Here is my complete Work....

I develop software according to client's need and sell them in a CD/DVD/Pen Drive and provide them a receiving (receipt). After that I provide them a free service for one year (which is included in software cost) and after one year I charge them for my services. 

But Some of my clients me for a valid Bill (with a TIN or some registration number), but as I googled and found that TIN is not available for these types of work, only applicable for service Tax. Here are my questions.

1) What should I provide to my client if they ask for a valid Bill ?
2) What are the other taxes for which my work is applicable ?
3) What is the transactional limit in a year for Service Tax ?

Any Help will be appreciated.
Thank You.
Shaiwal Tripathi
Asked 5 days ago in Service Tax from Varanasi, Uttar Pradesh
Hi,

If you sell the Software in a CD/DVD/Pen Drive, it'll be treated as Goods and liable to VAT as per the State VAT Act. In that case, you need to register for VAT with UP Govt and obtain a Tax Identification Number(TIN). There is a threshold limit for VAT Registration. Request you to consult a CA in UP or directly check with VAT Office in Varanasi.

1) Provide a Bill showing VAT if you are liable to register for VAT. Otherwise, provide a normal Bill and say you need not register for VAT.
2) Software Sold in CD/DVD/Pen Drive is liable to VAT and the Services which you provide from 2nd Year are liable for Service Tax. You will also have to pay Income Tax on the Profits from the Business
3) Threshold limit for Service Tax Registration is Rs. 9 Lakhs and to collect Service Tax from Customers is Rs. 10 Lakhs

Trust this clarifies your doubts. Feel free to revert for any clarifications.
Pradeep Bhat
CA, Bengaluru
95 Answers
5.0 on 5.0
  Talk to Pradeep Bhat
Hi,

1) No. VAT will not be applicable. However, Tax on Software is a grey area. Better to confirm with local CA once before taking a final decision
2) No. Service Tax Liability arises when your Total Income from Services exceeds Rs. 10 Lakhs. But you will have to register when Turnover exceeds Rs. 9 Lakhs. Note, if you don't pay VAT on Software, then the same will be treated as Services and the same should be included in calculating the Turnover for Threshold limit
Pradeep Bhat
CA, Bengaluru
95 Answers
5.0 on 5.0
  Talk to Pradeep Bhat
Dear Sir,

1. You are liable to pay VAT if your transaction amount during the year exceeds a certain limit. Limit you can check with any CA in your state. It must be 5 or 10lacs. If you are liable to pay VAT, provide invoice showing TIN number. Otherwise, provide a normal Bill and say you need not register for VAT.

2) Services which you provide from 2nd Year are liable for Service Tax. 

You are also liable to pay Income Tax on the Profits from the Business during the year.


3) Threshold limit for Service Tax Registration is Rs. 9 Lakhs and to collect Service Tax from Customers is Rs. 10 Lakhs

Please feel free to call/revert in case of any doubts

Thanks and Regards 
Abhishek Dugar 
CA CS B.Com
Abhishek Dugar
CA, Mumbai
877 Answers
5.0 on 5.0
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Hello Sir,

Since the Software is provided to a client, then VAT is applicable. But, there is a thresh hold limit to it, which in most of the states is Rs.10 Lakhs.

1. For the time being you may provide a bill mentioning your PAN.
2. No, other taxes. (if you prepare a software on behalf of the client and charge a service fee, then Service Tax is applicable)
3. The limit for registration is 9 Lakhs, and you need to start charging from 10 Lakhs.

Trust this clarifies your query. 

Feel free to call / get back in case of further clarifications. 

Thanking You. 

Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP 
Rohit R Sharma
CA, Mumbai
870 Answers
5.0 on 5.0
  Talk to Rohit R Sharma
Hello Sir,

Vat on Software is a very litigative thing. So it is advisable to register yourself under Vat, in order to avoid any future hassle.

Trust this clarifies your query. 

Feel free to call / get back in case of further clarifications. 

Thanking You. 

Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP
Rohit R Sharma
CA, Mumbai
870 Answers
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Dear sir,

it seems that you deal with customised software and hence no need to apply vat on the same.

If your total service income during the year is not more than Rs. 10,00,000 than no need to pay service ta in next year till your income reaches Rs. 10,00,000/-
Vishrut Rajesh Shah
CA, Ahmedabad
318 Answers
4.8 on 5.0
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