A Private Limited Company has a Managing Director. Is the Company/ Managing Director required to pay Service Tax on the remuneration payed to the Managing Director.
18 August 2012
Dear Friend,Services provided by the employee to its employer is mentioned in Negative List of Service Tax and hence not chargeable. Since Managing Director is whole time employee of the company thus the services provided by the Managing Director to the company is not taxable.
18 August 2012
Service provided by employer to employee is not covered under negative list. Rather The definition of service itself excludes services provided by the employees to employers.
Whole time directors and Managing Directors of the companies are considered as employees of the company in which they are directors. Hence, there is no service tax in respect of such employee directors. Service tax will apply only in case of non employee directors.
CAclubindia
