11 October 2012
sitting fees is not a part of remuneration of a director and service tax is liable on remuneration of director so sitting fees will not be charged to service tax.
11 October 2012
a new clause has been introduced 1(ba) to section 194J of tha ACT according to which sitting fees paid to directors are laible for TDS @ 10%
from 07.08.12 onwards ST is payable on directors sitting fees and as it is covered by reverse charge mechanism,it is directly paid by the co. to the govt
11 October 2012
Any remuneration paid to a director who is not the employee of the co. service tax is applicable and this service tax is covered under reverse charge therefore co need to pay service tax on it.
11 October 2012
Yes payment of director sitting fee and other payments / reimbursement of expenses to non-executive directors would fall under reverse charge mechanism from 7th August, 12. Accordingly if the services are rendered prior to 7th August, 12 i.e. Board / Audit Committee meeting was prior to 7th Aug, 12 and bill has also been issued prior to this date then no reverse charge and it would be taxable in hands of director.... However normally taxable services of such director would be below Rs 10 lacs thus no tax....
It is important to note that director services has been brought to tax net only from 1st July, 12 after introduction of negative list...
For further details read my detailed article on said issue in the October, 12 issue of The Chartered Accountant, the journal of ICAi...
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