The Hindu Business Line : Windows 7 to be available off the shelf soon

“Given the clarification, the retail pack of Windows 7 will be available shortly, and customers can upgrade their existing PCs,” a Microsoft India spokesperson said.

Budget levy

The centrepiece of the issue is the change that the recent Budget brought about in levy of taxes on packaged software; the move was aimed at addressing the long-standing issue of double taxation.

The Budget clarified that the right to use (licence) component of such software will attract service tax while the value of the media itself (the CD on which it is loaded) will attract a Counterveiling duty (CVD).

However, soon enough software importers started complaining about live consignments were getting held up, especially at Mumbai and Chennai cargo complexes.

In one case in Chennai, where fully packaged product was being imported, the authorities had refused to accept a split value (one value for media and another ascribed to right to use) in a single invoice.

The field formations took a view that CVD should be charged on entire amount. There were similar instances of cargo pile-ups in other ports.

However, CBEC has now clarified the issue that had vexed software companies including Adobe, Microsoft, and Symantec.

In the Chennai case, CBEC has clarified that the Budget notification itself entails splitting of value of the imported good into software and right to use, and has directed that assessments be done accordingly. Leading distributors such as Redington and Ingram Micro hope that the directive will filter down to the field formations soon.

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