Service tax on Directors' sitting fees

[Srivatsan Krishnamachari]

Dear Learned Friends,

As per Notification No:45/2012 Serial No:5 A services provided or agreed to be provided by a

director of a company to that said company is taxable under reverse charge mechanism (100%) Further vide Notification No:10/2014 another line is inserted "in respect of services provided or agreed to be provided by a director of a company or body corporate to the said company or body corporate"

Obviously whole time directors of a company drawing their salary do not come under the purview of these notifications. It is also a practice generally found, particularly so in case of private limited companies that such whole time directors are paid "sitting fees" also while attending the board meeting apart from their salaries and perks.Do these "sitting fees" attract service tax under RCM. Kindly clarify.

Regards,

K.Srivatsan

AI Summary

Service tax on directors' services: sitting fees may attract reverse charge unless within whole time employment exclusion.
Sitting fees paid to directors are taxable under reverse charge unless the director is in whole time employment, because the employee services exclusion covers services rendered in the course of employment; thus where a director's appointment constitutes a contract of service, sitting fees are not subject to service tax.