Reverse Charge- Services of Director, Service Tax

[Sanjeev Sharma]

As per Notn No 45/2012-ST dated 7.8.12, Service tax under reverse charge is to be paid by service recipient in respect of  services  provided or agreed to be provided  by a director of a company to the said company.

 

Whether service tax is to be paid on salary to be paid to whole time director/ managing director

Posts / Replies

[JAMES PG]

This is applicable only for non-executive directors. Not applicable to Managing Director/Executive Director/Whole time Director  etc who are employees of the Company

[Pradeep Khatri]

In my view, services provided by directors as employee in the course of employer- employee relationship would not be covered by the said provision as employer-employee relationship activities are already excluded from the definition of service itself under section 65B (44) of the Finance Act.

[Debtosh Dey]

Sec 65B(44) excludes service of employee and Dy. no.324/Comm(ST)/2008 read with Circular no. 115/09/2009-ST had clarified that director-company stand in employee-employer relationship. As long as the Notification & Circular are not withdrawn, there is no service tax liability for remuneration paid to directors.