Directors remuneration - 3rd amendment rule

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Sanjeev (Querist)
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10 August 2012 Monthly remuneration given to a director! Is tax applicable in this case ? Or exempted due to employer-employee relationship ?

CA Navin Jain

CA Navin Jain (Expert)
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10 August 2012 Tds is not applicable

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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10 August 2012 Remuneration given to executive director does not come within the definition of service to charge service tax.
There is employee - employer relationship and most importantly in the course of empoyement.
if any amount is paid other than in course of emmployement then only it will be chargeable for service tax.

Ram Avtar Singh

Ram Avtar Singh (Expert)
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10 August 2012 Service tax (third amendment) rules, 2012 - amendment in rule 2

Notification No. 46/2012-ST, dated 7-8-2012

In exercise of the powers conferred by sub-section (1) read with sub-section (2) of section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules further to amend the Service Tax Rules, 1994, namely:—

1. (1) These rules may be called the Service Tax (Third Amendment) Rules, 2012.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Service Tax Rules, 1994, in rule 2, in sub-rule (1),-

(A) in clause (d), in sub-clause (i),-

(i) after the item (E), the following item shall be inserted, namely;-

"(EE) in relation to service provided or agreed to be provided by a director of a company to the said company, the recipient of such service;";

(ii) in the item (F), in the sub-item (b), after the words "manpower for any purpose", the words "or security services" shall be inserted.

(B) after clause (f), the following clause shall be inserted, namely:—

"(fa) "security services" means services relating to the security of any property, whether movable or immovable, or of any person, in any manner and includes the services of investigation, detection or verification, of any fact or activity;"

RENGARAJ R.K

RENGARAJ R.K (Expert)
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27 August 2012 Regarding Service tax, if the director is the whole time director/Excutive director or MD then they are coming under employer - employee relationship. For other independent directors, tds and service tax @12.36% will have to be paid by the company vide notn 46/2012-ST dt 07.08.12.

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