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TMI BlogService tax on Director Sitting FeesX X X X Extracts X X X X X X X X Extracts X X X X ..... Service tax on Director Sitting Fees X X X X Extracts X X X X X X X X Extracts X X X X ..... erse charge. With the amendment in Service Tax Rule, 2004 vide notification no.9/2014 of Service Tax dated 11th July, 2014 the Rule 2(1)(d)(EE) of said rule is substituted namely "―(EE) in relation to service provided or agreed to be provided by a director of a company or a body corporate to the said company or the body corporate, the recipient of such service;" . I understand tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the change interprets as 'a service provided or agreed to be provided by a director of any other company to the said company are also liable to service tax. For eg. A Director of Company 'A' provides or agree to provide service to company 'B' then service tax is payable as per new amended rule. Kindly validate my understanding. regards, ganesh Reply By Pradeep Khatri: The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reply: Dear Ganesh, Reverse charge was imposed on services of non-executive and independent director to company w.e.f. 7-8-2012. The provision of reverse charge has been extended to services of director provided to body corporate (which are not companies). (entry added w.e.f. 7-8-2012. The words „body corporate‟ are added w.e.f. 11-7-2014). This should covers body corporate which a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re incorporated under some special Acts (like say LIC). It will not cover cooperative societies as cooperative society is not a „body corporate‟. It will also not cover societies. Regards Team YAGAY and SUN (Management and Indirect Tax Consultants) Reply By ganeshan kalyani: The Reply: Dear Sir, To bring into more clarity i would request to share your view that, for eg. whether t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Director of Company A is providing service to Company B (being group company) would fall within the ambit of service tax. regards, ganesh Reply By Rajagopalan Ranganathan: The Reply: Sir, If the Director of Company A provides service to Company B then service tax is payable by the Director of Company A. In this case reverse charge mechanism is not applicable. Reverse charge mechanism is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicable only when Director of Company A provides service to Company A. Reply By Pradeep Khatri: The Reply: Dear Ganesh, We are in agreement with Rajagopalan Sir's reply. Such services may fall either under 'Management or Business consultancy services' or any other services, depending on the very nature of services provided by the director of company A to the director of company B. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No reverse charge is applicable in this scenario and the provider of services would be liable to collect the applicable service tax from the recipient of services and would be under obligation to deposit it within prescribed time limit. This is for your kind information. Regards, Team YAGAY and SUN (Management and Indirect Tax Consultants) Reply By ganeshan kalyani: The Reply: Thanks Rajag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opalan and Pradeep sir for your valuable view. But i eager to understand why the amendment brought to Notification 30/2012 incorporating 'a body corporate' to existing 'a company'. I have referred The Companies Act 1956 to understand the definition of 'a company' and ' a body corporate'. i understand that a body corporate is a wider concept which includes a company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itself. Referring the amended notification again, i thought let me raise this query to clear my understanding. Thanks in advance for your view. Reply By Rajagopalan Ranganathan: The Reply: Sir, The Companies Act has used an excluding definition for body corporate, defining it as "Body corporate" or "corporation" includes a company incorporated outside India but doesnot inclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de- a. a corporation sole b. a co-operative society registered under any law relating to co-operative societies c. any other body corporate (not being a company company as defined in this Act), which the Central Govt. may, by a notification in the official gazette, specify in this behalf. Now, the concept of Corporation Sole is not defined anywhere in the Act. But concisely, apart from those exclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded specifically, a body corporate means any entity that has its separate legal existence apart from the persons forming it. It enjoys a completely different legal status apart from its members. So, a body corporate shall include: a company, a foreign company, a corporation, a statutory company, a statutory body, an LLP, etc. and such bodies that have separate legal existence. May be in view of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he definition incorporated in Companies Act, 2013, Rule 2(1)(d)(EE) should have been amended by Notification No.9/2014 of Service Tax dated 11th July, 2014 X X X X Extracts X X X X X X X X Extracts X X X X
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