Reverse charge

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 April 2013 If company is paying Director sitting fees to a whole time director, whether Service tax under reverse charge is applicable. What if Director is Non executive director?

CA Vikas Acharya

CA Vikas Acharya (Expert)
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30 April 2013 for ex-director, not taxable, as in under the nature of remuneration in terms of employemnt, hence out of the purview of definition service.
to non ex director, siting fee is chargable under reverse charge basis, as non-ex director are not in the employment of comopany.

see:
definition of service
and
45/2012

Querist : Anonymous

Querist : Anonymous (Querist)

02 May 2013 But director sitting fees to whole time director is not a part of salary as we deduct TDS under 194 J as a professional. Same is not shown in form 16.

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CA Vikas Acharya

CA Vikas Acharya (Expert)
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02 May 2013 sitting fees is payable only to an ordinary dierector i.e, no sitting fees can be paid to WTD/MD
If sitting fees is paid to WTD/MD, it shall be treated as payment of managerial remuneration.

this is as per section 309 of companies act, though difficult to understand there, you may use google even or Other writer's book.
if u are a ca student, more easy to find in munesh bhandari's finals book. can check in director's chapter.