PAYMENT OF SERVICE TAX ON MEETING FEE

[S.C. WADHWA]

A company provided the expenses of board meeting fee in its books as on 31/03/14.

Whether company is required to pay service tax on such board meeting fee or director will pay it.

[YAGAY andSUN]

Dear S.C. Wadhwa,

Your company is required to pay the service tax on such expenses, even if it is related to your director under reverse charge mechanism. Service Tax was required to pay on 31-03-2014. Now you would have to pay interest at applicable rate.

Regards,

YAGAY and SUN

(Management and Indirect Tax Consultants)

[Mahir S]

Yes, service tax is required to be paid by the Company for the Board Meeting Fee/Directors Sitting Fee under RCM; as rightly explained above.

No any abatement is available and service tax is to be paid on the total amount of the Board Meeting Fee

[Srivatsan Krishnamachari]

Dear Wadhwa,

Please make it clear whether Directors in this regard are employed in the company as whole time Directors or the Board consists of other Directors apart from those who are employed as whole time Directors and drawing remuneration.

Regards,

K.Srivatsan

[Ravi Kumar Somani]

Service shall be liable to be paid only on sitting fees paid to Non - Executive Directors. No service tax shall be payable in case the sitting fees is paid to Whole time or executive directors.

AI Summary

Service tax on directors' sitting fees: reverse charge applies to non-executive directors, with no abatement and interest for delay. The company must pay service tax under the reverse charge mechanism on directors' sitting fees recorded as of 31/03/2014, with interest for late payment; no abatement applies and the full fee is taxable, although sitting fees to whole time/executive directors are treated as not subject to service tax while fees to non-executive directors are taxable.