Service tax applicable on director remuneration

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This query is : Resolved

Devendra Tambe (Querist)

10 April 2012 Dear Sir,

We are P. Ltd. Company. We are paying remunaration to Director, which exceed Rs. 10 Lac to each Director. Under this case, 1.Company is liable to Deduct service Tax ?

2. Director is liable to obtain Service Tax No. ?

3. Whose liablity to pay Service Tax under this case if any.

CA Kishore Tallam

CA Kishore Tallam (Expert)

10 April 2012 Director Remuneration is salary to directors. Hence, it is not subject to service tax. Service tax will not be deducted. It will be levied.

Ajay Mishra

Ajay Mishra (Expert)

10 April 2012 Hi

Director is not liable to obtain ST Number. For more details go to the following link:

https://www.caclubindia.com/articles/tds-on-remuneration-paid-to-directors-13422.asp

Prabhakar

Prabhakar (Expert)

10 April 2012 No service tax is applicable on remuneration paid to the director.

Guest

Guest (Expert)

12 September 2012 Notification No. 45/2012-ST dated 7-8-2012 has been issued, amending the Notification No. 30/2012-ST dated 20-6-2012 and it has expanded the scope of reverse charge mechanism. With effect from 7-8-2012, services provided by the director to the company will be covered under the reverse charge mechanism. Service provided by Managing and Whole-time Directors/ Executive Directors (those who are under employment with the Company) are governed by the exclusion clause contained in the definition of ‘service’ under Section 65B (44) (b) which provides that service provided by employees to their employers in the course of or in relation to employment are exempt from service tax. Service provided by Part-time/ Expert/ Independent/ Nominee directors, etc., (those who are not under employment with Company), are in the nature of providing their professional/expert services to the company. Hence, the said Services would be chargeable to Service tax under Reverse charge by the Company w.e.f 07.08.2012.

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