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TMI BlogDirector's remuneration v/s service taxX X X X Extracts X X X X X X X X Extracts X X X X ..... Respected Forum, Will monthly Directror's remuneration paid to Directors of the company attrach SERVICE TAX as reverse charge? pls advice - Reply By Pradeep Khatri - The Reply = The Finance Act 2012 has introduced Service Tax which is applicable to anyone who provides a Service not covered under the negative/exempted list and if the value of annual revenue is more than Rs. 10 lakh. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Non-Whole Time Directors of the Company are presently not covered under the exempted list and as such, the sitting fee/ commission payable to them by the company are liable to Service Tax. Regular monthly payment to the full time/whole time directors of the company does not attract service tax. - Reply By Debtosh Dey - The Reply = Recent notifications 45 46/2012-ST both dated 7-Aug- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12 have included service by director - the first notification providing for reverse change on the company and the second amending Rule 2(d)(1) to include such service. Please advise what does these mean now. Debtosh Dey - Reply By Pradeep Khatri - The Reply = It means now service recipient will be liable to pay the service tax for such services. - Reply By Debtosh D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey - The Reply = Going through notifications 45 46/2012-ST both dated 7-Aug-12, tax on 'service...by a director' is payable by the company for which sec 2(d)(1) has also been amended. Does this mean all directors are attracted irrespective of wholetime or non-wholetime ? - Reply By Harsh Jindal - The Reply = As per Notification 46 dated Aug. 7, 2012, service provided or agreed to be pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vided by a director of a company to the said company, the recipient of such service i.e. company is liable to pay the tax in full on reverse charge basis. - Reply By Debtosh Dey - The Reply = I am sorry that the issue is still not clear as to whether non-wholetime directors only are attracted for tax payable by the company. I do not find any distinction made in the notifications 45 46/2012- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ST for wholetime or non-wholetime directors. If 'salary' to director is the criteria for considering him/ her as 'employee', then this needs clarification under service tax law itself. This is because a wholetime director may receive commission and perks besides salary. Moreover, many are opining on the basis of Income Tax Act as form 16 is issued to salaried directors for TDS. I feel this m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay not be a correct view since there may be salaried non-wholetime directors. Also, salaried partners are not 'employees' in Income Tax (proving 'salary' criteria as incorrect). Further, in order to treat directors as wholetime 'employees', Companies Act requires certain formalities to be observed on appointment, remuneration, limitation of directorships, etc. - Director's remuneration v/s servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce tax - Query Started By: - Ashok Chopra Dated:- 16-8-2012 Service Tax - Got 6 Replies - Service Tax - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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