Export duty on software

There is a definitional issue with enforcing import duties on software that does not arise with physical goods. If I make widgets in Elbonia and then export them to the US, I can be charged duty on every widget that crosses the border. However if I write software then I only need to move one copy across the border to my US agent, and then authorise them to sell as many copies as they like without import duty as all the sales occur in the US.

Stopping me from repatriating my money back to Elbonia means adding exchange controls. Sign up to join this community.

The best answers are voted up and rise to the top. Stack Overflow for Teams — Collaborate and share knowledge with a private group. Create a free Team What is Teams? Learn more. Is a tariff on software or "information" possible? Ask Question. Asked 3 years, 7 months ago. Active 3 years, 7 months ago. Viewed 2k times.

Improve this question. Dai Dai 1 1 silver badge 9 9 bronze badges. A technical answer might be more expected from security. Customs do not need to rely in the "stated cash value", they can do their own assesments.

I'm not sure if your last link is propaganda or some weird humor Software is required to run and operate automatic data processing machines i. Typically, software are developed independently and then loaded into machines for operation. Generally two types of software are used in machine i embedded software and ii other than embedded software. The embedded software is fused in the machine itself and does not have any separate existence. Therefore, the embedded software is part and parcel of the machine and value of the machine is inclusive of software embedded therein.

There is no separate classification for the embedded software and for the purpose of duty, it is assessed as part and parcel of the machine. Classification In case of software other than embedded, it is required to be loaded on the machine. Relevant classification is reproduced hereunder: - Discs for laser reading systems: 31 -- For reproducing phenomena other than sound or image : Software: 31 11 Information Technology software 31 19 Other 40 - Magnetic tapes for reproducing phenomena other than sound or image: Software : 40 11 Information Technology software 40 19 Other - Other : 91 -- For reproducing phenomena other than sound or image : Software: 91 11 Information Technology software on floppy disc or cartridge tape 91 12 Information Technology software on disc or on CD ROM 91 13 Information Technology software on other media 91 19 Other As can be seen from the above, classification of software will depend on the media on which it has been recorded.

Duty structure. Duty Structure Basic customs duty for all software is Nil. Exemption Notification No. Import through e-mail, internet. To be a movable property, software should be recorded in a media. Therefore, custom duty is levied on the software recorded in a media is brought from abroad. On import of services GST will be based on reverse charge method just as the Service tax is today i.

IGST will apply on reverse charge mechanism. But there is a input credit allowed in ISGT on imports. Although it does not apply to Software sector, the anti-dumping duties and safeguard duties will continue to be applied as they were and have not been subsumed in the IGST. Exports under GST will be Zero rated i. Software exports will be zero rated. The biggest impact will be on units presently enjoying exemptions on inputs like service tax in SEZ.

Exemptions will be replaced by refunds after exports. This will put lot of burden on arranging working capital for the inputs. This burden will be higher for manufacturing firms than services firms. On pursuance of commerce ministry, in a recent announcement, the finance ministry has agreed to relax the refund pains. If duty refunds could not be made within seven days, then government will pay interest to exporters.