TaxTMI 
TaxTMI 
2026 (7) TMI 1543
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....services rendered as directors. Since Notification No. 30/2012-ST fastens liability upon the company under Reverse Charge in respect of services provided by Directors, the remuneration paid to the Managing Director and Whole-time directors is liable to Service Tax. According to the Revenue, merely because TDS has been deducted under Section 192 of the Income Tax Act or provident fund contribution has been made, the relationship of employer and employee of cannot automatically be inferred. 3. Learned Counsel for the respondent submits that the Managing Director and Whole-time Directors were appointed under Section 196 and 197 of the Companies Act, 2013. Their remuneration was treated throughout as salary; TDS was deducted under Section 192 of the Income Tax Act; Form-16 was issued; provident fund contributes were made; and all statutory compliances were undertaken treating them as employees. Therefore, their services are excluded from the definition of "service" by virtue of Section 65 B(44) (b) of the Finance Act, 1994. 4. It is further argued that an Independent Director was separately treated as a professional, TDS was deducted under Section 194 J and GST under Reverse Char....
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.... applies while interpreting the exclusion contained in Section 65 B(44) (b) of the Finance Act, 1994. 9. This Tribunal in Amara Raja Batteries Ltd., Vs Commissioner of Central Tax, Tirupati [2024 (390) ELLT 361 (Tri-Hyd)] has categorically held that remuneration subjected to TDS under Section 192 represents salary and that a Managing Director or Whole-time Director may simultaneously be a promoter and yet continue to remain the employee of the company. The Tribunal further held that the ratio contained in the CBIC Circular issued under GST is equally applicable while deciding disputes under the Service Tax regime. The relevant paras of the decisions as follows: "20. We find that Hon'ble Supreme Court in the case of Ram Prasad Vs CIT (cited supra) has dealt with the entire issue of whether a managing director ST/30233/2021 can be an employee or otherwise and has placed great reliance on the terms of AoA of the company for arriving at the conclusion whether a managing director was an employee or otherwise. The Hon'ble Supreme Court was of the view that Managing Director was required to exercise his power within the terms and limitations prescribed in the AoA subje....
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....e assessed the same as business income chargeable to different rate and exemptions, etc. They have admittedly not disputed the deduction of TDS by treating the said remuneration/commission, etc., as salary. 23. We also find that the Original Authority has gone beyond the realm of SCN, in as much as he has examined Mr. Jayadev Galla's role as Hon'ble Member of Parliament to support his case that he could not have been a whole time director. Firstly, since this ground was not mentioned in the SCN, this could not have been sprung on the Appellants at the stage of OIO without giving them adequate opportunity to rebut the same and therefore, this should not be a ground for deciding that Mr. Jayadev Galla is not a whole time director. Secondly, as cited by the learned Counsel, the Hon'ble Supreme Court has held that there is no bar on Hon'ble Member of Parliament to be a Managing Director or on the Board of any company. Apart from this, irrespective of whether Managing Director or Director is a whole time or part time, it does not take away the fact that he cannot be termed as an employee at all of the company, as there could be a part time employee and salary pa....
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....) of Finance Act, 1944. In this case, there is nothing on record that remunerations paid to him in his capacity as Managing Director included any amount paid or payable to him as Vice Chairman separately. 26. Accordingly, we allow the Appeal and set aside the impugned order with consequential benefits, if any, as per law. Since we have decided the matter on merit itself, we are not going into the aspect of limitation." 10. The same principle has thereafter been consistently reiterated in Thriveni Earth Movers Pvt Ltd., Vs Commissioner of GST & C.Ex., Salem, [2025 (8) TMI 10 (Tri. - Chennai)], Vinayaka Electro Alloys Pvt Ltd., Vs Commissioner of GST & C.Ex. Salem, [2025 (6) TMI 13 (Tri. - Chennai)], Dixcy Textiles Pvt Ltd., Vs Commissioner, Salem, [2025 (5) TMI 316 (CESTAT Chennai)], Lilanand Magnesites Pvt Ltd., Vs CCE & ST, [2025 (26) CENTAX 172 (CESTAT Ahmedabad)], Maithan Alloys Ltd., Vs CCE & ST, Bolpur, [2020 (33) GSTL 228 (Tri. - Kol.)], Allied Blenders & Distillers Pvt Ltd., Vs CCE & ST, [2019 (24) GSTL 207 (CESTAT Mumbai)], NRB Industries Bearings Pvt Ltd., Vs CCE & ST, [2019-8-TMI-600-CESTAT-MUM (CESTAT Mumbai)] & Vectus Industries Ltd., Vs CST, [2020-1-TMI-423....