Service tax on directors salary

In my view, services provided by directors as employee in the course of employer- employee relationship were he recieves Salary, would not be covered by the said provision and Notification no 45/2012 as employer-employee relationship activities are already excluded from the definition of service itself under section 65B (44) of the Finance Act.

For the Rent Part the director have to charge the Service Tax to Company and pay it to the Government if the Company pays rent to the director. Here the Director is not providing any professional service rather the relation here is of Owner and Tenant and not of Director and Company. Reverse charge will not appy here

Hope it is clear.

The wholetime Diroctors if they are fulltime employment of the company,their services does not attract Service Tax[Notification No 45/2012 dated 7.8.2012].Regarding other categories of directors Service Tax is payable.The directors of the company are not required registration as liabilty to pay the Service Tax is on the company under reverse charge method.Regarding rent they are required service Tax no. if their receipt is more than 10 lac per annum.

Agree...

Agree with Prabath Sir...

Agree...

Since you are deduction TDS u/s 192, assuming Employer-employee relationship exist, no need to pay service tax by anyone as correctly explained by Asif Ji.

For Rent, if the Rent exceeds Rs. 10 Lakh (threshhold exemption under notification no. 33/202) then no need for service tax, else the concerened director has to take registration and pay ST.

thanks to all of you'll for your valuable reply..

Thanks for Right answer.

Originally posted by : Manoj Agarwal
	Since you are deduction TDS u/s 192, assuming Employer-employee relationship exist, no need to pay service tax by anyone as correctly explained by Asif Ji.   For Rent, if the Rent exceeds Rs. 10 Lakh (threshhold exemption under notification no. 33/202) then no need for service tax, else the concerened director has to take registration and pay ST.

Sorry for incorrect interpretation regarding RENT. 

Since the rent is paid by the company to its director, and it is not related to employer-employee relationship, it is covered under notification no. 30/2012 as amended by 45/2012 w.e.f  07-08-12 and due to applicability of reverese charge, the ST on 100% portion of rent paid (without exemption) is to be paid by the company. 

@ Manoj Agrawal

As per my view how come the liability to service tax is on the Company. The Company is liable to pay ST on Reverse charge only on those services which are provided by the Director in the capacity of a Director. When the Company pays Rent to the Director, he recieves Rent in Capacity of the Owner of the Property and not for being a Director of the Comapny. On Renting Service the Director will be liable to pay ST as Reverse charge will not applicable

Pls clear

Dear Sir, 

Notification no. 45/2012 reads as below:

"in respect of services provided or agreed to be provided by a director of a company to the said company"

So, it doesn't say that service of a director must be provided in the capacity of director, so in my view, any service provided by a director to the company is covered by the above clause and due to applicability of reverse charge, tax is to be paid by company. The service provided by the director as an employee of the company is excluded because it is not a 'service' as defined u/s 65B(44).