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Service tax on commission paid to directors

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Querist : Anonymous

Querist : Anonymous (Querist)

24 June 2013 I would like to know whether the commission paid to directors is liable for service tax and if yes who is liable to pay it -whether the company or the director.If possible are there any related case laws.
Thanks

Ganeshbabu K

Ganeshbabu K (Expert)
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24 June 2013 1)Service tax is payable on services provided by non-executive, nominee and independent directors to the company w.e.f. 1-7-2012. Service tax is not payable in case of Managing Director or wholetime director or executive director, if the director is in full time employment of the company.

2)As per rule 2(1)(d)(EE) of Service Tax Rules inserted w.e.f. 7-8-2012 and Notification No. 30/2012-ST dated 20-6-2012 amended w.e.f. 7-8-2012, company receiving the services of directors is liable to pay service tax under reverse charge mechanism.

Thanks & regards
Ganesh babu k

Querist : Anonymous

Querist : Anonymous (Querist)

25 June 2013 Thanks Ganesh

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