Service tax on director fees

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 October 2012 If the meeting was held in July 2012 (ie the time when the liability to discharge service tax was on the directors)but payment was not done. Now if the payment is to be done in the month of October. Who is liable to pay service Tax? If the liability is on director should he issue the invoice if his income is less than 10 lacs.

MOHAMMAD SALIM

MOHAMMAD SALIM (Expert)
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12 October 2012 If invoice is raised prior to 7th August, 2012 then even though payment is made after 7th August, 12 the POT as per Rule 3 of POT Rules will fall prior to 7th August, 12 thus will not come in reverse charge and director is personally responsible for payment of service tax.

However as normally the taxable services of director would be less than 10 lacs accordingly he is not required to pay service tax...

Hope this would serttle the issue...

Querist : Anonymous

Querist : Anonymous (Querist)

12 October 2012 Thanks a lot for the reply.
Is it necessary for the director to raise the invoice before 7th august if his income is less than 10 lacs.

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MOHAMMAD SALIM

MOHAMMAD SALIM (Expert)
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12 October 2012 Yes it is very important as POT is dependent on it. However if not issued within 30 days then date of completion of service i.e. date of meeting in case of sitting fees would be considered as POT.