TaxTMI 
TaxTMI 
SERVICE TAX ON DIRECTORS REMUNERATION
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....ERVICE TAX ON DIRECTORS REMUNERATION<br> Query (Issue) Started By: - Mehul Pandya Dated:- 25-5-2015 Last Reply Date:- 6-6-2015 Service Tax<br>Got 10 Replies<br>Service Tax<br>Greetings to all the Members, As per Notification No. 45/2012 - Service Tax dated the 7th August, 2012, Sr. No. 5A- in respect of services provided or agreed to be provided by a director of a company to the said company.(und....
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....er RCM). my query is - Will all the Directors fall under this or is it only for the Non - Executive Directors and the Independent Directors who are not the Employees of the Company, Kindly Explain, with any government order, if any.. Thanks. Reply By CS SANJAY MALHOTRA: The Reply: Refer to Section 65B(44)(b) of Service Tax Act, which excludes services provided by an Employee to Employer during....
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.... the course of employment. Services rendered by Managing Director & Whole Time Director is covered under the above section and are exempt from Service Tax. Reply By ashish chaudhary: The Reply: Directors having employer-employee relationship with company not covered under RCM. Liability under RCM arises in case of other directors. Guiding factor could be terms of appointment, nature of deductio....
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....n of TDS, form filed with ROC etc. Reply By Mehul Pandya: The Reply: Thank you all Reply By Mehul Pandya: The Reply: If company gives Remuneration to the Directors then is it taxable? If company pay consideration other than salary? Reply By CS SANJAY MALHOTRA: The Reply: Dear Mehul, Managing Director and Whole Time Directors are full time Employees in the Company as these are executive po....
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....sts and rest are non-executive posts such as Independent Directors. Hence amount / consideration paid to independent directors gets covered under Service Tax. Reply By rishi mohan: The Reply: Consideration paid to directors other than salary is liable to service tax. Reply By MAHESH MAIYA: The Reply: Dear Sir, Kindly clarify the below scenario. Mr. A is subscriber to the Memorandum and one o....
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....f the Directors of M/s XYZ Co. M/s. XYZ Co is 100% subsidiary of a foreign company. Mr. A is management consultant to M/s. XYZ Co. and the entire show in India is run by him. Mr. A gets fixed monthly consultancy charges along with yearend commission based on performance of the company. Mr. A collects his consultancy through his proprietor firm by raising bills. Apart from the above, Mr. A is ....
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....not in the rolls of the company and do not get any remuneration. At present, Mr. A is raising bill along with service tax in the name of his proprietorship firm. In the above scenario, we would like to understand whether reverse charge mechanism is applicable to M/s. XYZ Co as per the notification no. 30/2012-ST Dt. 20.06.2012. Reply By CS SANJAY MALHOTRA: The Reply: Dear Mahesh, Service rend....
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....ered by Mr. A to Company M/s XYZ is in the capacity of Independent Director, which is liable to Service Tax under Reverse Charge. Can't comment on services of Mr. A as Management Consultant through his proprietorship firm as the same acts as conflict of Interest with the Company. Same person acting as Independent Director with M/s XYZ and also as an Independent Director ??????? Reply By MAHE....
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....SH MAIYA: The Reply: Dear Sir, Thanks for the reply. I would like to add some more information on this aspect. XYZ is a Pvt Ltd Co having TWO Indian and TWO foreign directors. None of the directors are getting sitting fees,attendance fees etc OR any other fees in any other form which are typically paid to the directors of a company. Mr.A is an Indian Director who has been contracted by XYZ co....
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.... as a management consultant represented by his sole proprietary firm and his scope of work includes; 1.Recruitment and training 2 procurement of materials 3 Billing 4 Advertising 5 Legal compliances 6 Capital projects In short, his services are more in the nature of a executive director or a whole time director or a managing director . For this services he is paid fixed +variable pay. He has ....
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....his own service tax registration ( in the name of his proprietary firm) and also bills other organisations as a consultant under this code . He includes service tax in his bill and discharges it on the due dates. My question is should his billing attract reverse charge mechanism from the xyz company point of view. The department is getting service tax. But who has to pay the service tax is our q....
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....uestion. Please clarify. Thanks Mahesh Maiya.P Reply By SHRIVARDHAN PANDIT: The Reply: Dear Mahesh, The director has raised bills in capacity of outside service provider. no need to do RCM.<br> Discussion Forum - Knowledge Sharing ....