What will be tax liability for IT items purchased from abroad


#1

hello everyone,
will anyone please suggest me that:
if my firm purchase a software from out of India (Taiwan) for reselling in India, how much duty i have to pay (in Taiwan and India). for example suppose the initial price in Taiwan is Rs 1000/- then what would be final price for me in India, so that i can decide selling price in India?


#2

If the software license is digitally delivered (downloaded) then only IGSTâ– 18% is applicable on the import transaction with invoice from the Taiwan provider. So your cost is Rs.1180 (1000 + 180 of IGST payable) if you do not sell that license.

If you sell the software license for Rs.3000 then you have to collect Rs.3540 (either 3000+18%GST, or 3000+9%CGST+9%SGST).

This IGST of 540 is offset against the IGST of 180 paid on import (input tax credit). So you have to deposit 360 as IGST.

It is slightly more complicated in the case of CGST+SGST as CGST of 270 can only be offset by IGST of 180. So you have to deposit CGST of 90 + SGST of 270.

Gross profit = (3540-1180)-(360 to be deposited for GST) = Rs.2000 = (Purchase price - Sale price)


#3

So nice of you sir, but what about if software media (cd) is delivered by post from Taiwan


#4

Your Cost would be Price + BCD + IGST on (Price + BCD) + Cess on IGST (if applicable)
where BCD = Basic Customs Duty

See the bottom-left corner on page 2 of this document.