SERVICE TAX UNDER REVERSE CHARGE MECHANISM

[SURYAKANT MITHBAVKAR]

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.

AI Summary

Employee remuneration exclusion: director salary paid as employment income does not attract reverse charge service tax liability.
Remuneration paid to directors who are regular employees and receive TDS/Form 16 is treated as salary and falls within the employee-exclusion; such payments are not services for service tax purposes and therefore do not attract liability under the reverse charge mechanism. TDS obligations under income tax remain separate and reverse charge cannot be applied or collected like TDS from the payee.