Whether a director can be cosidered as an employee of a com?

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This query is : Resolved

Hetal Shah (Querist)

02 September 2008 A company which has been formed in Aug-07. It is not having any employees throughout the year. Only director and Managing directors are appointed as per requirements under Companies Act. The directors have not given any salary / managerial remuneration expenses.

THere are many expenses like motor car maintanence, repair, depreciation, entertainment, travellig etc. expended by directors.

Whether this company will be liable for Fringe benefit tax?

Whether a director can be considered as a employee for this purpose?

CA E.A.Ravikumar

CA E.A.Ravikumar (Expert)

02 September 2008 Circular no 8 of 2005 on FBT clarifies as;

Whether FBT is payable by an entity having no employee? For example, will law firms having retainer-relationship arrangements and no employees be liable to pay FBT?
3. An entity, which does not have any employee on its rolls, will not be liable to FBT. Therefore, law firms having retainer-relationship arrangements and no employees will not be liable to FBT.

Accordingly a company which has no whole time, executive or managing director may not be liable for FBT

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