Directors' remuneration not liable for service tax under reverse charge mechanism.

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Full Text of the Document

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....Remuneration (salary, allowances, commission on company profits) paid to directors of a company is not liable to service tax under reverse charge mechanism. The Income Tax Act, 1961 deals with salary paid to employees, and TDS was deducted u/s 192 and Form 16 issued. CESTAT in Allied Blenders and Distillers Pvt Ltd and Supreme Treves Private Limited cases held that such remuneration paid to directors is not liable to service tax based on identical facts. Considering the ratio of these judgments, the demand for service tax on directors' remuneration is unsustainable, and the appeal is allowed, setting aside the impugned orders.....