Service tax on commission paid to Managing Director/ Directors by the company -reg

Service tax on directors' remuneration: payments for board duties are not taxable, separate consultancy fees are.

Remunerations paid by a company to its Managing Directors or Directors, even if labelled as commissions, are not commissions within the scope of Business Auxiliary Service and are not chargeable to service tax. Amounts paid for performance of board or managerial functions are not payments for Management Consultancy Service; however, separately compensated advisory or consultancy services provided by directors are taxable as management consultancy.