Information Technology Software service has been subjected to service tax with effect from 16th May 2008 with the Government notifying the date of amendments by the Finance Act 2008 in the Finance Act 1994 which is statutory provision for levy of Service Tax. The date of 16th May 2008 has been notified vide Notification No. 18/2008 – Service Tax as the date on which the provisions of the Finance Act 2008 related to service tax come into force.
As defined by the Finance Act 2008, “information technology software” means any representation of instructions, data, sound or image, including source code and object code, recorded in a machine readable form, and capable of being manipulated or providing interactivity to a user, by means of a computer or an automatic data processing machine or any other device or equipment.
Further, services provided by a consulting engineer in relation to advice, consultancy or technical assistance in the disciplines of both computer hardware engineering and computer software engineering shall also be subject to service tax.
(vi) acquiring the right to use information technology software supplied electronically.