commission paid

[Mrityunjay jha]

Sir,

please advice

The company paid commission to the hole time  M. direcor, he is employee of the company get sallary, commission , bonus  Service tax is Applicable.

 

A Educational trust service received from Law firm under Legal & Proff.  and Invoice received for the M/o December 12. Service tax is applicable

[sanjeev bajaj]

With respect to Q. 1,  the whole time director is an employee of the company and as such it is not covered under the definition of services as defined under clause (44) of section 65B of the Finance Act,1994. Commission is part and parcel of the salary in the course of employment.

With respect to educational trust service, it depends whether it is carrying any activity relating to industry, commerce or any other business or profession i.e it falls under the definition of "Business Entity". If your trust is not carrying the above then the reverse charge mechanism does not apply.

AI Summary

Commission to whole-time director treated as employment income, not an independent taxable service. A whole-time director who is an employee and receives salary, commission and bonus is within the employment relationship and such commission is treated as part of salary, thus not a 'service' under clause (44) of section 65B of the Finance Act, 1994. The reverse charge on legal services received by an educational trust depends on whether the trust qualifies as a business entity by carrying activities relating to industry, commerce, business or profession; if it does not, reverse charge does not apply.