The Madras High Court ruled that the Service tax relevant to ‘Anti-Virus Software’ as it comes under the information technology software.
The applicant is the owner of K7 Computing Private Limited develops Anti-Virus Software in the designation of ‘K7 Total Security’ and ‘K7 Anti-Virus’, which is antivirus software. Under Section 73(1) of the Finance Act, 1994 the need for the service tax of Rs .4, 27, 99,059 payable for the duration from July 2012 to March 2013 both along with the penalty as well as the interest which was asked in the written appeal.
The problem arises on the issue of whether the antivirus software comes under the Information technology software stated beneath Section 65 (53a) of the Finance Act, 1994.
The applicant claims that he is giving the VAT on the sale of antivirus software from the sale of goods and services and has checked properly through the Tamil Nadu Value Added Tax Act upon legal returns furnished by them and thus the applicant can give the service tax but it is not sure that the tax can be claimed or not.
The respondent, in turn, claims that the antivirus software is a description which is recorded in a machine-readable pattern that implements the interactivity to the End User within a computer which has internet connectivity and which severely comes under the information technology software.
The antivirus software in CD form comes under the information technology software as it constitutes distinct specifications said, Justice M.S. Ramesh. Indeed all the mandatory conditions stated beneath the description of Information Technology Software are important.
The applicant has been unable to provide the special proof in a context that the antivirus software is different and does not come under the information technology software. Hence the court has refused the petition of the applicant that the antivirus software does not come under the information technology software.
“Since the petitioner is liable to pay service tax but has not discharged the service tax liability, the provisions of Section 68 of the Finance Act, 1994 r/w. Rule 6 of the Service Tax Rules have been violated and therefore, I do not find any infirmity on the part of the Department, in imposing interest under Section 75(i) along with penalty under Section 76(1) of the Finance Act, 1994,”
