Page 72 - GSTL_3rd September 2020_Vol 40_Part 1

6 GST LAW TIMES [ Vol. 40
made to the customers particular requirement does not cover under the defini-
tion of goods and comes under service and is not amenable to tax under the Act.
6. By the Finance Act of 1994, Chapters V and V-A were inserted and
provisions relating to Service Tax was incorporated. Section 65(95) defines the
Service Tax as under :
“Service Tax” means tax leviable under the provisions of this Chapter.”
Section 66 defines charge of service tax as under :
“66. Charge of service tax. - There shall be levied a tax (hereinafter re-
ferred to as the service tax) at the rate of twelve per cent. of the value of
taxable services referred to in sub-clauses (a), (d), (e), (f), (g,) (h), (i), (j), (k),
(l), (m), (n), (o), (p), (q), (r), (s), (t), (u), (v), (w), (x), (y), (z), (za), (zb), (zc),
(zh), (zi), (zj), (zk), (zl), (zm), (zn), (zo), (zq), (zr), (zs), (zt), (zu), (zv), (zw),
(zx), (zy), (zz), (zza), (zzb), (zzc), (zzd), (zze), (zzf), (zzg), (zzh), (zzi), (zzk),
(zzl), (zzm), (zzn), (zzo), (zzp), (zzq), (zzr), (zzs), (zzt), (zzu), (zzv), (zzw),
(zzx), (zzy), (zzz), (zzza), (zzzb), (zzzc), (zzzd), (zzze), (zzzf), (zzzg,) (zzzh),
(zzzi), (zzzj), (zzzk), (zzzl), (zzzm), (zzzn), (zzzo), (zzzp), (zzzq), (zzzr),
(zzzs), (zzzt), (zzzu), (zzzv), (zzzw), (zzzx), (zzzy), (zzzz), (zzzza), (zzzzb),
(zzzzc), (zzzzd), (zzzze), (zzzzf), (zzzzg), (zzzzh), (zzzzi), (zzzzj), (zzzzk),
(zzzzl), (zzzzm), (zzzzn), (zzzzo), (zzzzp), (zzzzq), (zzzzr), (zzzzs), (zzzzt),
(zzzzu), (zzzzv) and (zzzzw) of clause (105) of section 65 and collected in
such manner as may be prescribed.
7. Thus, the U.P. Trade Tax Act has been enacted by the State Legisla-
ture while the Finance Act is a Law enacted by the Parliament and both the Laws
operate in different areas.
8. According to revisionist-assessee it had entered into a number of
agreements for providing consultancy services with Government, Semi-
Government and other authorities within the State of U.P. and has provided ser-
vices for development of application software.
9. The dispute is in regard to this unbranded software developed by
the assessee for its customers for which the assessing authority issued a show
cause notice on 13-2-2004 for making assessment for the relevant year. Through
the aforesaid notice the assessee was required to give explanation as to why no
tax was deposited for development and sale of software amounting to
Rs. 4,96,08,284/-. It was further required to submit detail, as to whom the sale
was made within and outside the State and further the notice stated why the
Company was not liable to pay tax. The assessee was required to submit his re-
ply by 25-2-2004. Revisionist-assessee replied the said notice which was received
on 24-2-2004, wherein it was specifically mentioned that Lucknow unit which has
STP location and non-STP location, the STP location was working on similar ba-
sis as Noida STP providing services only to overseas clients, while Lucknow non-
STP centre caters to domestic clients by providing application software devel-
opment and support services (generally known as “consultancy services”), and
licensing of standard software packages, generally known as product for sales. It
was further stated that billing done for consultancy services, i.e., application
software development and support services for domestic clients, do not fall with-
in the definition of term goods because these are services rendered for develop-
ment of software, according to clients specific requirement.
10. Reliance was also placed on the decision of Andhra Pradesh High
Court in the case of M/s. Tata Consultancy v. State of Andhra Pradesh, in which the
Court held software designed and made for customer for his individual need is
not goods. It was also replied that out of Rs. 4,96,08,824/-, Rs. 14,58,380/- is on

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