We have paid remuneration to directors on monthly basis and all directors are registered with Registrar of Companies.
Further we have issued FORM 16 every year to them.
In view of the above, whether we have to deduct service tax on remeneration paid to directors under reverese charge mechanism or not necessary.
No Service Tax on Director Remuneration Under Reverse Charge as Per Section 65B(44)(b) of Finance Act A query was raised regarding the applicability of service tax under the reverse charge mechanism on remuneration paid to directors, who are registered with the Registrar of Companies and receive Form 16 annually. Multiple responses clarified that since the directors are considered employees of the company, their remuneration is treated as salary. According to Section 65 B (44) (b) of the Finance Act, services rendered by an employee to an employer are not considered services for tax purposes. Therefore, no service tax is applicable under the reverse charge mechanism on such payments. (AI Summary)
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