Service Tax For IT Industry

The word "consultancy" is not defined in the Service Tax Act 1975. The ordinary and general meaning of consultancy may therefore be relied upon.

This means "the act of providing expert advice and notification of facts and information". It can generally be accepted that such services would not include work of a routine and mundane nature and where no expert opinion is expressed.

The persatuan Industri Komputer Malaysia (PIKOM) has clarified that for the computer industry, consultancy services include the following:

1. Consultancy in purchase computer
2. Consultancy in program/software development
3. Consultancy in implementing software development
4. Consultancy in selecting a system integration
5. Consultancy in computer management information system (MIS)
6. Consultancy in formulate an information system and information technology strategy
7. Consultancy in other consultation on services relating to computer project include advise on business strategy, on organisational set up and future directions
8. Computer project management/management information system

Those not subject to service tax:

• Installation, training, implementation work on computer
• Cost of hardware/software products
• Warranties on hardware/software
• Maintenance of hardware or software (on call basis, no fixed contract or agreement being signed. Otherwise, refer to No 5. above)