Taxing the intangible *

            

Details


Case Code : CLIBE038
Publication date : 2005
Subject : Business Environment
Industry : Business Software & Services
Length : 04 Pages

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Abstract: ICMR India ICMR India ICMR India ICMR India RSS Feed

The caselet discusses the nature of software as a product. It goes into the rulings of various courts in India with regard to the levy of sales tax. The caselet also explores the definition of goods and its various constituents. It focuses on the concern of analysts over the impact of tax on the prices of personal computers.

Issues:

Is software an intellectual property or a product?
Is software knowledge or a piece of goods?
How to distinguish between tangible products and intangible products.
Taxation of canned and uncanned software in India.
Taxation of software and its impact on the sale of personal computers.

Introduction

On November 5, 2004, the Supreme Court of India delivered a landmark judgment on the question of whether software was intellectual property or a product that would attract sales tax.

The court ruled that software was a product, which could be taxed. The ruling was in connection with a petition filed in the Supreme Court by the Indian software major, Tata Consultancy Services (TCS), challenging the Andhra Pradesh High Court order ...

Questions for Discussion:

1. Critically analyze the judgment of the Supreme Court on software and discuss the future implications of the Supreme Court's ruling on the Indian IT industry.
2. Comment on Soli Sorabjee's argument and the references he pointed out while arguing the case.

Key words:
Tata Consultancy Services (TCS), Uncanned software, Canned software packages, Tangible commodities, Intellectual property, Definition of goods, General Sales Tax Act, Article of value, Embedded software, IT industry.




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