director liable to service tax

[ANKUR SINGHAL]

in case of hospital which have five director, all the director are doctor & hospital paid huge amount of professional fees to director for service provide by director, but service tax excempt in  hospital.

So in that case service tax liable to hospital on fees paid to director.

Please clarify that issue

[CASeetharaman KC]

The services provided by an Authorised  Medical Practioner in his capacity as a Medical Practioner is covered under exempted services. The area which is covered under the reverse charge mechanism as per Notification no 30/2012 dated 20-06-2012 is in relation to services provided by a director of a company to the company in the administration of the company and also does not cover employee directors. Please note that the basis of charge in this case is different and the nature of service rendered is different.

AI Summary

Hospitals Exempt from Service Tax on Directors' Medical Fees; Reverse Charge Not Applicable for Employee Directors Per Notification 30/2012. A query was raised regarding the liability of service tax on professional fees paid to directors, who are also doctors, by a hospital. The response clarified that services provided by an authorized medical practitioner are exempt from service tax. The reverse charge mechanism, as per Notification No. 30/2012, applies to services provided by a director in the administration of a company, not covering employee directors. Therefore, the hospital is not liable for service tax on the fees paid to the directors for their medical services.