Salary to Director

[Rajeev Kedia]

If we paid salary to director is service tax to be charged ?

AI Summary

Service Tax Not Applicable to Executive Directors' Salaries; Non-Executive Directors' Fees Subject to Reverse Charge. A discussion forum addresses whether service tax applies to directors' salaries. It is clarified that service tax does not apply to salaries of executive directors, as they are employees. However, non-executive directors' fees and commissions are subject to service tax under reverse charge, with the company responsible for payment. The Ministry of Corporate Affairs specifies that any increase in remuneration due to service tax on non-whole time directors does not require government approval, even if it exceeds profit limits. The applicability of Cenvat credit for service tax paid by companies is also discussed, indicating potential eligibility under certain conditions.