Remuneration paid to whole-time directors employed by the...

Remuneration paid to whole-time directors employed by the company is not liable to service tax, as it is considered salary. However, sitting fees paid to non-employed directors are subject to service tax under the reverse charge mechanism. The matter regarding payment of service tax on sitting fees to non-employed directors needs to be remanded to the adjudicating authority to verify the correctness of the reconciliation provided by the appellant. The Tribunal has relied on previous decisions and held that remuneration in the form of salary to whole-time employed directors is not subject to service tax.