Software in physical form should be goods :
Though the GST Law defines development of software as ‘service’, software in physical form (branded as well as tailor made) is ‘goods’ in Customs Tariff Act.
Software in physical form should still be held as ‘goods’.
In Tata Consultancy Services v. State of Andhra Pradesh (2004) 141 Taxman 132 = AIR 2005 SC 371 =2004 AIR SCW 6583 = 271 ITR 401 = (2005) 1 SCC 308 = 137 STC 620 = 178 ELT 22 (SC 5 member Constitution bench), it has been held that canned software (i.e. computer software packages sold off the shelf) like Oracle, Lotus, Master-Hey etc. are ‘goods’. The copyright in the program may remain with originator of programme, but the moment copies are made and marketed, they become ‘goods’.
Earlier also, in Associated Cement Companies Ltd. v. CC 2001(4) SCC 593 = 2001 AIR SCW 559 = 128 ELT 21 = AIR 2001 SC 862 = 124 STC 59 (SC 3 member bench), it was held that computer software is ‘goods’ even if it is copy rightable as intellectual property.
In State Bank of India v. Municipal Corporation 1997(3) Mh LJ 718 = AIR 1997 Bom 220, it was held that ‘computer software’ is ‘appliance’ of computer. It was held that it is ‘goods’ and octroi can be levied on full value and not on only value of empty floppy. [In this case, it was held that octroi cannot be levied on license fee for duplicating the software for distribution outside the corporation limits].
In Inventa Software India P Ltd. v. ACCT (2008) 17 VST 362 (Karn HC DB), it has been held that application software development in financial accounting, inventory control, sales analysis, purchase order system and other professional services is nothing but software development programme. It is ‘goods’.
Customised and non-customised software both are goods – Infosys Technologies Ltd. v. Special Commissioner (2008) 17 VST 256 = 233 ELT 56 (Mad HC).