TaxTMI 
TaxTMI 
If we paid salary to director is service tax to be charged ?
Salary to Director
14 Aug 2012 
7 Replies 
8935 Views Asked by
Service tax on directors' services is payable on non whole time directors and borne by the company under reverse charge.
Remuneration or commission payable to non whole time (non executive) directors is subject to service tax and is payable by the recipient company under the reverse charge mechanism. If the company pays the tax on such director services, the tax is deemed part of the directors' remuneration and may increase amounts countable against statutory remuneration ceilings; the MCA permitted that increases solely attributable to service tax need not obtain prior Central Government approval for the relevant year. Cenvat credit may be available for such tax as an input service subject to the Cenvat Credit Rules and reverse charge limitations. (AI Summary)
Remuneration or commission payable to non whole time (non executive) directors is subject to service tax and is payable by the recipient company under the reverse charge mechanism. If the company pays the tax on such director services, the tax is deemed part of the directors' remuneration and may increase amounts countable against statutory remuneration ceilings; the MCA permitted that increases solely attributable to service tax need not obtain prior Central Government approval for the relevant year. Cenvat credit may be available for such tax as an input service subject to the Cenvat Credit Rules and reverse charge limitations. (AI Summary)