Sitting fees

as far as i am concerned service tax shall not be charged on payment of sitting fees to directors.

I have to make a correction. Service tax will be required to be paid and TDS should be deducted on the amount inclusive of Service tax

In my opinion, Service tax shall be charged on sittings fees paid to non-executive directors, since the same has come within ambit of service tax w.ef. 7-Aug-2012, by virtue of notification  45/2012 issued by CBEC.

Hence, the company shall be liable to pay service tax @ 12.36% on service tax under reverse charge mechanism.

Further, TDS shall also be deducted on sittings fees paid to directors u/s 194J @ 10% on amount exclusive of service tax (since that portion of service tax is noyt payable to director)

and following journal entries shall be passed.

Sitting fees Exp. A/c Dr.   10,000

                    To Bank A/c                             9,000

                    to TDS PAYABLE                    1,000(10% of 10,000)

If the co. is eligible for CENVAT 

CENVAT -Reverse charge A/c  Dr.             1,236

                     To Service tax liability(reverse charge)         1,236

in chalan under which head service tax to pay

business auxillary services or management consultant services i think

Since, this category is not pre-existing the same can be paid in the residual 120th category, as can be found in the list of services in the latest Circular No.165.