By CA Manoj Kohli 3rd March,2010 Downloading of software for personal use is now proposed to be taxed under service tax and attracts tax @ 10.3%.
Normally service tax is payable by service provider. However, if service provider is non resident, service receiver is the person liable to take service tax Regn and pay tax to Govt, as if he himself is deemed as service provider. In this case, the basic exemption limit of Rs. 10 lakhs is not available.
As a result if you download a software from a foreign website and pay Rs. 100, get prepared to take service tax Regn and pay tax and file service tax returns !!!