Service tax on rent by service receiver

This query is : Resolved

CA Parul Saxena (Querist)
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15 November 2013 Our co. is giving monthly rent of Rs.10000 to the director and co.is filing service tax return as service receiver...
Clarification given to me by taxation manager is:-
''As director's turnover of rent is not crossing the taxable limits so co.is under obligation to take registration and to pay tax and to file return as service receiver.
In my opinion this is quite wrong and moreover this service doesnt come under reverse charge so no service tax is payable by co.

Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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15 November 2013 Remuneration paid to non-executive directors only is subject to service tax under RCM. If the Director is an executive or whole time director then the relation is not that of Director / Company, but Employer / Employee. In that case no service tax is applicable either on the Director or under RCM.

If the accommodation has been provided to a whole-time director or executive director, no service tax need be paid.

Any remuneration paid to a non-executive / whole-time director is subject to Service Tax under RCM. The provision of accommodation to non executive director is part of remuneration paid for director services and hence subject to RCM. However, since the company would already be registered under Directors' Services no separate registration need be taken for payment of service tax on accommodation under any other head.

CA Parul Saxena

CA Parul Saxena (Querist)
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15 November 2013 sir please carefully read the query director is providing building to company....company is not providing accommodation to director

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