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Service tax on sponsoring education of director

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harcharan singh

64 Points Posted on 04 July 2016

Dear Experts,

We have sponsored MBA in USA for one of our directors who is not on payroll of company. My question is that will this payment fall under reverse charge on payment to directors. I'm banking on POP rules under which this service is not taxable as our director has studies abroad and lives abroad during tenure of studies.

We have paid all fees directly to the institution and nothing is paid as reimbursements to him.

Please let me know should our company deposit service tax on this on reverse charge or not. If yes then why.

Replies (1)

mohammad rasool baig

Management Consultant

997 Points Posted on 09 July 2016

Harcharan singh ji

How payment to educational institution will become payment to director. Since it is not paid to director for the services provided by him.

If we consider it is paid on behalf of the diector for services which director agreed to be provided in future. In this case, yes service tax will come into picture.

If we wanted to bank on POP then we need to consider the placeof provision of director services rather than educational institution services.

Hope. you are clear....