Dear All,
As per Notn No 45/2012-ST dated on 07/08/2012, services provided or agreed to be provided by a director of a company to the said company, the company is liable to pay service tax of 100% as service receiver on reverse charge mechanism basis.
But I would like to know the definition of directors under this rule. Whether all directors are coming under this clause or some exclusion are there? Please suggest me on this and if possible provide me the base of it.
Clarification on Service Tax: Directors as Employees Exempt Under Notification 45/2012-ST, Others Subject to Tax A query was raised regarding the definition of directors under Notification 45/2012-ST, which mandates that companies pay 100% service tax on services provided by directors under the reverse charge mechanism. It was clarified that directors who are under contractual employment and receive salaries (e.g., whole-time, managing, or executive directors) are considered employees and are exempt from this tax. However, directors not employed by the company are considered service providers and subject to service tax. The Companies Act and Section 65B(44) of the Finance Act, 1994, were referenced for further clarification. (AI Summary)
TaxTMI 
TaxTMI 
