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Case Code: CLIBE038
Case Length: 4 pages 
Period: --  
Pub Date: 2005
Teaching Note: Not Available
Subject :Business Environment
Organization :--
Industry :Business Software & Services
Countries : --

Taxing the intangible *



The caselet discusses the nature of software as a product. It goes into the rulings of various courts in India with regard to the levy of sales tax. The caselet also explores the definition of goods and its various constituents. It focuses on the concern of analysts over the impact of tax on the prices of personal computers.
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  • Is software an intellectual property or a product?
  • Is software knowledge or a piece of goods?
  • How to distinguish between tangible products and intangible products.
  • Taxation of canned and uncanned software in India.
  • Taxation of software and its impact on the sale of personal computers.
On November 5, 2004, the Supreme Court of India delivered a landmark judgment on the question of whether software was intellectual property or a product that would attract sales tax.

The court ruled that software was a product, which could be taxed. The ruling was in connection with a petition filed in the Supreme Court by the Indian software major, Tata Consultancy Services (TCS), challenging the Andhra Pradesh High Court order ....
1. Critically analyze the judgment of the Supreme Court on software and discuss the future implications of the Supreme Court's ruling on the Indian IT industry.

2.Comment on Soli Sorabjee's argument and the references he pointed out while arguing the case.


Tata Consultancy Services (TCS), Uncanned software, Canned software packages, Tangible commodities, Intellectual property, Definition of goods, General Sales Tax Act, Article of value, Embedded software, IT industry.

* This caselet is intended for use only in class discussions.
** More comprehensive case studies are priced at Rs.200 to Rs.700 (US $5 to US $16) per copy.