TaxTMI 
TaxTMI 
Applicability of Service Tax on Commission Payable to Non-Whole Time Directors of a Company Under Section 309 (4) of the Companies Act, 1956- Approval of Central Government Under Section 309/310 of the Companies Act.
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....pplicability of Service Tax on Commission Payable to Non-Whole Time Directors of a Company Under Section 309 (4) of the Companies Act, 1956- Approval of Central Government Under Section 309/310 of the Companies Act. <br>News and Press Release<br>Dated:- 17-8-2012<br><BR>Press Information Bureau Government of India Ministry of Corporate Affairs 17-August-2012 15:42 IST Applicability of Service ....
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....Tax on Commission Payable to Non-Whole Time Directors of a Company Under Section 309 (4) of the Companies Act, 1956- Approval of Central Government Under Section 309/310 of the Companies Act The Ministry of Corporate Affairs has decided that any increase in remuneration of Non-Whole time Director (s) of a Company solely on account of payment of service tax on commission payable to them by the com....
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....pany shall not require approval of Central Government under section 309 and 310 of the Companies Act even if it exceeds the limit of 1% or 3% of the profit {u/s Section 309 (4)} of the Company, as the case may be, in the financial year 2012-13. It may be noted that the Finance Act 2012 has introduced Service Tax which is applicable to anyone who provides a Service not covered under the negative/e....
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....xempted list and if the value of annual revenue is more than Rs. 10 lakh. The Non-Whole Time Directors of the Company are presently not covered under the exempted list and as such the sitting fee/commission payable to them by the company is liable to Service Tax. If such Service Tax is paid by the company, it will be deemed to be a part of remuneration under section 198 of the Act and would accor....
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....dingly increase the remuneration amount of such Non-Whole Time Directors. This remuneration could then exceed the limit of 1% profit [u/s 309(4)] of the company when the company has a Managing/ Whole Time Directors/ Managers or 3% of the profit [u/s 309(4)] of the company if the company does not have a Managing/ Whole Time Directors/ Managers, as the case may be. As per existing provisions of the ....
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....Companies Act, 1956, until now, this situation required prior approval of Central Government u/s 309 and 310 of the Act. **** ST/-<BR> News - Press release - PIB....