Services provided by non executive directors

This query is : Resolved

Niraj Saraf (Querist)
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21 September 2012 Whether company is liable to pay service tax on services provided by non exec director, under Reverse charge mechanism, where the director issues invoices which the company account for as professional fees and deduct TDS under sec 194J ?

RENGARAJ R.K

RENGARAJ R.K (Expert)
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21 September 2012 Yes, company is laible to pay service tax on services provided by non-executive directors, ie. independent directors. For all remuneration paid to them, company has to pay service tax under reverse charge and can take cenvat credit on such payments to adjust in the output service tax. Service tax need not be deducted and only tds is deducted.

Niraj Saraf

Niraj Saraf (Querist)
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21 September 2012 Thanks Sir. But the company is already deducting TDS u/s 194J towards payment for professional fees. Even then do company need to pay service tax under reverse charge ?

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RENGARAJ R.K

RENGARAJ R.K (Expert)
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21 September 2012 yes, from 01.07.12, such services attract both and hence it has to be paid to income tax and service tax dept.