In the matter of SPSS South Asia Pvt. Ltd, the applicant was a Private Limited Company, registered under the Goods and Services Act, 2017 and is an authorized seller for various IBM SPSS Software in India. 
The applicant is a pure trader in such software and does not develop / modify any software prior to selling it to a customer. The applicant has sought advance ruling in respect of the following question:-“Whether the supply of licenses for internet downloaded software fall within the ambit of Notification No.47/2017-Integrated Tax (Rate) dated 14th November 2017 and and Notification No.45/2017- Central Tax (Rate) dated 14.11.2017 or not ?
Thus the core issue before AAR Karnataka was to decide is the classification of the supply of software licence by the applicant i.e. whether it amounts to supply of goods or services. 
The AAR observed that the software supplied by the applicant is a pre-developed or pre-designed software and made available through the use of encryption keys and hence it satisfies all the conditions that are required to be satisfied to cover them under the definition of ‘goods’.
Further the goods which are supplied by the applicant can’t be used without the aid of the computer and has to be loaded on a computer and then after activation would become usable and hence the goods supplied is “Computer Software” and more specifically covered under “Application Software”. Further the Explanatory Notes to the Scheme of Classification of Services stipulates that the services of limited end-user licence as part of packaged software are excluded from the SAC 997331 that covers Licensing services for the right to use computer software and databases. Hence the supply made by the applicant is covered under “Supply of goods” under tariff heading 8523.
The Notification No.45/2017- Central Tax (Rate) and Notification No.47/2017-Integrated Tax (Rate) stipulate the rate of CGST / IGST @ 5%, if the goods of computer software is supplied to public funded research institutions subject to fulfillment of the conditions prescribed in the said notification. In the instant case the applicant is supplying computer software to National Institute of Science Education and Research, Bhubaneswar, a public funded research institution, under the administrative control of Department of Atomic Energy (DAE), Government of India. Further the said institute has also furnished a certificate as required to fulfill the required condition.