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GST on Director remuneration

SANKAR BOSE (PARTNER) (42 Points)

19 April 2020

whether gst is applicable on Director remuneration.

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9 Replies

suraj pahuja (TAX PRACTITIONER) (178 Points)
Replied 19 April 2020

As per latest advance ruling, yes gst to be deposited on reverse charge basis on director remuneration

RAJA P M ("Do the Right Thing...!!!") (127506 Points)
Replied 19 April 2020

If it's paid as per salaries then GST not applicable.

Durga Prasad (97 Points)
Replied 19 April 2020

On reverse charge mechanism basis company have to pay Gst on director remuneration.

Shivam RC (Student) (23683 Points)
Replied 19 April 2020

The latest ruling given by the Rajasthan Authority for Advance Ruling will be applicable only for the applicant i.e. Clay Crafts India Pvt Ltd.

We all know about the validity of the ruling . It does not matches with the Provision and Rules of the GST Act.

As per Para 1 of SCHEDULE III of the CGST Act 2017, "Salary is out of the purview of GST. "

And as per Notification No. 13/2017 - Central Tax ( Rate ), dated 28.06.2017, Services supplied by a Director of a Company or a body corporate to the said company or body corporate is taxable under "REVERSE CHARGE MECHANISM" ( RCM ) Basis under Section 9(3) of the CGST Act 2017.

These services includes Director's Board Meeting sitting fees etc. But not on Remuneration.

Therefore , as per the Law, GST is not applicable on Remuneration.

I hope the ruling will be challanged by the applicant in the AAAR for further clarification.

1 Like

Kishor Lulla (864 Points)
Replied 20 April 2020

Depends on accounting and effects given in other acts. TDS u s 192 is must

CA Naveen Chand (Chartered Accountant) (12729 Points)
Replied 20 April 2020

GST shall be paid by the company under reverse charge

Pankaj Rawat (GST Practitioner) (55037 Points)
Replied 20 April 2020

If it is paid to whole time director , no GST is applicable.

Ashok Nagane (2 Points)
Replied 28 April 2020

Why gst is paid by company Any reason other than AAR

CA Altamush Zafar (GST Consultant) (15921 Points)
Replied 28 April 2020

Where salary/remuneration received by director is in capacity of employee no GST chargeable. However the complete situation depends on a lot of factors including contractual terms.