Tata Consultancy Services v State of AP

• TCS sold canned software packages developed by others (such as Oracle and Lotus), as a licensee, on media such as floppies and CDs
• The sales tax authorities in Andhra Pradesh assessed these sales to tax as sales of goods
• The Sales Tax Appellate Tribunal (1 April 1996) upheld the assessment, and the Andhra Pradesh High Court dismissed TCS's tax revision on 12 December 1996
• The question was whether intellectual property contained in floppies, disks or CD-ROMs is "goods" under the Andhra Pradesh General Sales Tax Act 1957

1. Whether canned software sold on a medium is "goods" under the Andhra Pradesh General Sales Tax Act
2. Whether there is any distinction between branded and unbranded software for this purpose

• Canned (branded) software is goods; the appeals were dismissed
• Majority (Variava J.): the definition of goods is wide; there is no reason in principle to distinguish branded from unbranded software, but the question of unbranded software was not decided in this case
• Concurring (S.B. Sinha J.): software is goods if it has the attributes of goods, namely utility, being capable of being bought and sold, and being capable of being transmitted, transferred, delivered, stored and possessed
• Intellectual property, once put on a medium and sold, can be goods

Whether a thing is goods depends on whether it has the attributes of goods, not on whether it is tangible in the ordinary sense. Canned software is marketed, bought and sold, and can be delivered, stored and possessed; when sold on a medium it is goods for sales tax purposes. The status of customised software was left open.