MLM Directory

Tax implications?

Kindly tell me when a foreign company (Japanese company)who was importing software by billing through its Singapore subsidiary from India, forms its own company in India. What will be tax implications when buying the software from local market and exporting it to its Group companies. Please let me know the Direct & Indirect taxes involved in this type of situation.

Public Comments

1. There is no central excise duty on software in India. Supreme court of India in case of TCS has ruled that canned software is goods and can be liable to sales tax- now VAT. However, most of the software makers are not paying VAt.even otherwise. in case of export; there is no tax. As far as direct tax is concerned exemption from export is governed under 80 HHC of Income Tax Act which is applicable to Indian Companies .refer to provisions on the link below: http://www.allindiantaxes.com/incometaxch-6as80hhc.php Though above provision may not be available in future. Further, it is advisable to have export unit as a trading unit under SEZ for which lots of sops are admissible. refer to SEZ details on the link below: http://www.allindiantaxes.com/sez.php