Applicability of service tax (Service Tax)

This query is : Resolved

Naval kishor

( Author )
16 July 2012

Dear Sir

Wether Service Tax is Applicable w.e.f. 01.07.2012 on Remunaretion paid to Partners of Partnership Firms and to Directors of Companise.

RENGARAJ R.K

( Expert )
16 July 2012

According to explanation given by the Ministry of Finance on 13.07.2012, Payment to directors in the following category attracts service tax by the employer,i.e Company. Payment to partners not appearing in the explanation.

Payments to directors...

Not excluded and thus taxable:
Applicable to all kinds of directors except of government regulatory bodies
Any monetary or no-monetary consideration
Director’s fee
Commission/bonus
Company car/ travel reimbursements

CA Navin Jain

( Expert )
16 July 2012

@ Rengraj Sir Ji,

In the case of director remuneration. reverse charge is applicable or not.

kartik_somu

( Expert )
16 July 2012

Rengraj sir,

pls provide the notification or circular no. where they have mentioned that directors remuneration will be taxable.

RENGARAJ R.K

( Expert )
16 July 2012

Mr Kartik Somu,

Please see the caclubindia News column -item no.2, finance ministry clarification. Please download it. Around 50 pages, very beautifully designed and explained but the pain is for the service receiver/employer. please see slide no.21 for payment to directors.

CA Navin Jain

( Expert )
16 July 2012

Sir ji, can u provide the Link?

RENGARAJ R.K

( Expert )
16 July 2012

Please see: 45974_11893_steducation.pdf

Please note Mr Navin Jain, remuneration is not under the ambit of service tax, it is Director fee, car/Travelling expenses, bonus/commission and not salary. All kinds of directors.