Pradeep Jain - Chartered Accountant

Sir, a) a whole time director has let out a building to the Company , which is used by an employee . Would this rent payment would be within the purview of reverse tax introduced recently (b) Similarly a director charges for his professional services (as CA ) to the Company .Would this be covered under Reverse charge if the bill is inclusive of service tax claimed by him?

(a) The CBEC has been introduced reverse charge mechanism on services provided by directors through the Notification No. 45/2012 dated 07/08/2012. The relevant Para is as follows: ““5A in respect of services provided or agreed to be provided by a director of a company to the said company” The notification does not specify that which services provided by directors are covered under the reverse charge mechanism? The interpretation of above Para makes it clear that every services provided by director of company will cover under the Reverse charge mechanism and company is liable to pay 100% service tax in respect of services provided by directors under the Reverse charge mechanism. So rent payment is also covered under the reverse charge mechanism. (b) In case of services provided by directors to company, 100% liability on company to pay service tax on company under the reverse charge mechanism. The reverse charge is mandatory not an option. If the bill is inclusive of service tax and it is mentioned on the face of invoice then calculation can be done on cum-price basis and service tax will be paid accordingly. Also, the payment will be made to director after deducting service tax.

Sir, we are a taxpayer dealing in health care services. We have been making supply on which tax was payable by us but we have not paid the same erroneously. The same has been pointed out by department recently. Please suggest whether we have to pay interest and penalty along with tax.

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Sir We are dealing in trucks. We have received an export order from foreign buyer. We wish to procure trucks from 5 different manufacturers and supply them directly to the port without receiving on our own premises. Can we do the same to take benefit of merchant export by paying tax @ 0.1%.

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