Whether Service Tax on Dir com is eligible of input ser credit?

[R MUTHURAJ]

Dear Sir / Mam,

Can any one say, whether a company pays Service tax on Directors Commission / Sitting Fees on reverse charge basis is eligible for taking the same as Input Service Credit.

If the answer is affirmative, i request you to give the justifications.

 

Regards,

R.Muthuraj

[YAGAY and SUN]

Yes, it is. 

Since, directors provide directions to the business, take decisions, finalise strategy, polices, goverence, hence,Services rendered by the directors to the company should be considered as input services and Service Tax paid by the company should be eligible for Cenvat credit subject to Cenvat Credit Rule, 2004.

AI Summary

Input service credit eligibility for service tax on directors' fees affirmed where services qualify as input services under credit rules.
Service tax paid by a company on directors' commission or sitting fees under reverse charge qualifies as input service credit because directors provide managerial and governance-related services that are input services; credit is available subject to compliance with the Cenvat Credit Rules, 2004.