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

Exempt medical services: fees to doctor-directors are outside the director reverse-charge scope for company administration services. Services rendered by an Authorised Medical Practitioner are categorized as exempted services for service tax. The reverse-charge mechanism under Notification No. 30/2012 targets director services in company administration, excludes employee-directors, and does not cover medical services rendered in a professional capacity; the nature and basis of charge differ between the exemption and the reverse-charge provision.