Service tax on retainer ship

Originally posted by : Mukesh Agarwal
	is there is any service tax liablity on me if any director receive retainer ship from his company on monthly basis????

I understand your question as " You are a director of a company and you receive monthly retainership from a company. Whether service tax is chargable on this amount received by you"

1. Service tax is applicable if there is any taxable service. Services provided by employee to employer have been excluded from the definition of ‘service’ itself.
2. Reverse charge provisions have been made applicable to the remuneration paid by company to directors w.e.f. 7-8-2012, making company liable to pay service tax on such remuneration paid to their directors.
3. Service tax will be payable on sitting fees paid to directors for attending meetings of Board and Committees of Board

Conclusion:

Retainership does not create any employer and employee relationship.

Service tax on director's fees is covered under reverse charge mechanism hence your company and not you  will be liable for service tax

You would be receiving this amount for attending meetings & advising company as a director, hence nomenclature of fees paid will not change the nature of payment.

In my opinion, as discussed above your company will be liable to pay service tax on the monthly retainership fees paid to you.