𝗖𝗘𝗦𝗧𝗔𝗧 𝗔𝗵𝗺𝗲𝗱𝗮𝗯𝗮𝗱 𝗥𝘂𝗹𝗶𝗻𝗴 𝗼𝗻 𝗦𝗲𝗿𝘃𝗶𝗰𝗲 𝗧𝗮𝘅 𝗼𝗻 𝗦𝗼𝗳𝘁𝘄𝗮𝗿𝗲 𝗔𝗰𝘁𝗶𝘃𝗮𝘁𝗶𝗼𝗻 𝗖𝗵𝗮𝗿𝗴𝗲𝘀 📢 𝗧𝗵𝗲 𝗧𝗿𝗶𝗯𝘂𝗻𝗮𝗹 𝗵𝗲𝗹𝗱: "Activation charges for equipment/software features are part of the sale of goods, covered by VAT, and not subject to Service Tax under the category of 'Business Auxiliary Services'."

🔍 𝗙𝗮𝗰𝘁𝘀: 𝗖𝗼𝗺𝗽𝗮𝗻𝘆: Black Box Limited 𝗜𝘀𝘀𝘂𝗲: Whether activation charges for software are taxable as 'Business Auxiliary Services' under Section 65 of the Finance Act. 𝗔𝗰𝘁𝗶𝘃𝗶𝘁𝘆: The appellant collected activation charges from customers for after-sales software/equipment services. Show cause notices were issued, claiming Service Tax liability.

⚖️ 𝗝𝘂𝗱𝗴𝗲𝗺𝗲𝗻𝘁: The Tribunal ruled that the activation charges were part of the sale of goods, which had VAT applied, and were not services under the Act. The appellant was selling goods, not providing a service, and no service tax was applicable. The appeal was allowed, setting aside the demand.

📜 𝗖𝗮𝘀𝗲 𝗜𝗻𝗳𝗼𝗿𝗺𝗮𝘁𝗶𝗼𝗻: 𝗧𝗶𝘁𝗹𝗲: Black Box Limited vs. Commissioner of Central Excise & ST, Ahmedabad-III 𝗢𝗿𝗱𝗲𝗿 𝗗𝗮𝘁𝗲: 04 January 2023 📜 This ruling clarifies that software activation charges, when part of the sale of goods, are not subject to Service Tax.