Service tax on Director Sitting Fees

[Ganeshan Kalyani]

Dear Sir,

As per Notification No.30/2012 dated 20th June, 2012 the service provided or agree to be provided by a Director (non-executive, nominee or independent) of a company to a company is liable to service tax under reverse charge. With the amendment in Service Tax Rule, 2004 vide notification no.9/2014 of Service Tax dated 11th July, 2014 the Rule 2(1)(d)(EE) of said rule is substituted namely "―(EE) in relation to service provided or agreed to be provided by a director of a company or a body corporate to the said company or the body corporate, the recipient of such service;" .

I understand that the change interprets as 'a service provided or agreed to be provided by a director of any other company to the said company are also liable to service tax. For eg. A Director of Company 'A' provides or agree to provide service to company 'B' then service tax is payable as per new amended rule.

Kindly validate my understanding.

regards,

ganesh

AI Summary

Reverse charge on director services extended to body corporate; provider liability applies when directors serve other companies.
Amendment to Rule 2(1)(d)(EE) broadened the reverse charge recipient description to cover services provided by a director to a "body corporate" as well as a company, so recipient-based reverse charge applies where a company or body corporate receives director services; cooperative societies and societies are excluded. When a director of one company provides services to another company, normal provider-liability applies and the director must charge and remit service tax under the relevant taxable service category.