19 August 2012
If there are 3 directors in a company out of them 2 are whole time working directors. And that 2 whole time working directors get salary,ex-gratia and directors sitting fees from company and other director gets sitting fees.
Will service tax reverse charge in above case applicable? If yes, then on all the amt they get from company or else..? Is it applicable to all directors(i.e employee or non employee)?
20 August 2012
Agree with Nikhil, Department long back in 1990 has already clarified that manging direcotrs are not entitled for sitting fees. It is the duty of executive directors to attend the meeting. Even if the comopany pays them seeting fees that will be considered in over all part of the remuneration. Accordingly, Service tax is not liable in that case.
1.If Whole Time Directors get salary, sitting fees and exgratia then on all amt TDS will be deducted as per Sec. 192 OR on others 192 but on sitting fees as per 194J.
2. If director gets only sitting fees say 100000/- TDS should be deducted or not. If yes then is it under section 194J OR it should be treated as Salary only and TDS under sec 192.
21 August 2012
Sitting fees is given to the director not according to the terms of the employment. Sitting fees is paid only if he actually attends the meeting and not in terms of the emplyement. Even if it is part of overall limit specified for executive directors. it is not salary and accordingly, TDS will be deducted u/s 194J
21 August 2012
Sitting fees is given to the director not according to the terms of the employment. Sitting fees is paid only if he actually attends the meeting and not in terms of the emplyement. Even if it is part of overall limit specified for executive directors. it is not salary and accordingly, TDS will be deducted u/s 194J
21 August 2012
The service tax is payable by the Company only for Non-Executive Directors, i.e independent directors and foreign directors and Government Directors, under reverse charge mechanism.
For ED, MD & WTDs are not covered as they are employees and such services are excluded from the ambit of service tax net.
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