Services performed by director of the company - Payment of Service Tax reg.

[vinay wakde]

The services performed by a director (other than Managing Director/Executive Director/Whole time Director who are employees of the Company) fall within the ambit of taxable services with effect from 1st July, 2012. Accordingly, service tax would be applicable on sitting fees and/or commission to Non-Executive Directors of the Company.

Kindly let us clarify the following :-

1. Whether Director is required to obtain Service Tax Registration?
2. Whether the payment shall be made on the strength of Invoice/Bill.
3. Whether Input service credit is eligible if the unit manufacturing unit & providing output services.
4. If the Sitting fees is not more than Rs. 10 Lacs, whether the company has  to pay Service Tax reversed charge method?

Regards,

VINAY

AI Summary

Director services taxable: non executive director fees and commissions attract service tax, requiring registration and compliance.
Non executive, part time and independent directors' services, including sitting fees and commission, are taxable under service tax following the negative list regime; emoluments of managing, executive or whole time directors as employer-employee payments remain outside service tax. Compliance questions include registration, invoicing, input tax credit eligibility for a unit providing taxable outputs, and the applicability of the reverse charge mechanism; taxpayers may rely on prior circulars but should document employment terms and route expenses through the company to manage tax consequences.