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TMI Blog2024 (9) TMI 1600X X X X Extracts X X X X X X X X Extracts X X X X ..... for the rental premises to the director. This activity is nothing to do with the relationship of the directors with the company as director. As per the entry 5A of the notification dated 07.08.2012, it is clear that only those services which are provided by the director to the company in the capacity of directors are covered under service tax liability under reverse charge mechanism on the service recipient. For example the director is paid director fees, seating fees etc. the same will be covered under reverse charge mechanism and the company is liable to pay the service tax whereas in the present case there is no such payment involved. The payment which was sought to be taxed by the Revenue is rent of immovable property which is in indiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation No.30/2012-S.T. dated 20.06.2012 read with Notification No.45/2012-S.T. dated 07.08.2012 wherein, the entry serial No. 5A provides for a reverse charge mechanism with regard to the services provided bya director of a company to the body corporate or the said company. The said entry is reproduced for ready reference:- Sr. No. Description of a service Service Tax payable by service provider Service Tax payable by service receiver 5A In respect of services provided or agreed to provide by a director of a company or a body corporate to the said company or the body corporate Nil 100% On the basis of the said notification, the show cause notice proposed to demand service tax from the appellant on reverse charge basis on the rent paid to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er. 4. On careful consideration of the submissions made by both the sides and perusal of records, we find that as per undisputed facts of the case directors who own the immovable property has given on rent to the appellant company and the appellant company has paid the rent for the rental premises to the director. This activity is nothing to do with the relationship of the directors with the company as director. As per the entry 5A of the notification dated 07.08.2012, it is clear that only those services which are provided by the director to the company in the capacity of directors are covered under service tax liability under reverse charge mechanism on the service recipient. For example the director is paid director fees, seating fees et ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of Revenue), No. 15/2012-Service Tax, dated the 17th March, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 213(E), dated the 17th March, 2012, and (ii) notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 36/2004-Service Tax, dated the 31st December, 2004, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 849(E), dated the 31st December, 2004, except as respects things done or omitted to be done before such supersession, the Central Government hereby notifies the following taxable services and the extent of service tax payable thereon by the person liable to pay service tax for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner (Appeals) in the impugned order is as follows: Here, in the present case, Shri Naveen Swahney and Shri D. K. Prashar, both Directors are individual providing a service of renting of immovable property and the appellant is a service receiver. Since the condition of the notification is fulfilling, the service is rightly covered under reverse charge mechanism and therefore, the service tax is payable by the appellant. 13. The Commissioner (Appeals) assumed that Naveen Sawhney and D.K. Prashar are providing service of renting of immovable property as Directors of the appellant, whereas they are providing the said service in their individual capacity as owners of the premises and not as Directors of the appellant. 14. The appellant, in such ..... X X X X Extracts X X X X X X X X Extracts X X X X
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