RCM Liability on Director for services used by company
This query is : Resolved
24 February 2023
Dear sir
A construction company has taken lease license in the name of director and taken GST registration in the name of director. The payment of Royalty has been done by the company and company has used the material in his construction work. Now department issue notice to Director for RCM on Royalty.
Whether there is any such case law of this type and how to deal with this notice?
A construction company has taken lease license in the name of director and taken GST registration in the name of director. The payment of Royalty has been done by the company and company has used the material in his construction work. Now department issue notice to Director for RCM on Royalty.
Whether there is any such case law of this type and how to deal with this notice?
24 February 2023
All services by director to company in the capacity of director is covered under RCM
25 February 2023
Notice is served to director by GST Department for RCM on Royalty since the lease license was in the name of Director. The company has already paid the RCM on such royalty and booked the expenditure of royalty in its books. The director has not done anything in his books regarding this transaction.
27 February 2023
Currently the department is looking at royalty to government as services provided by government and getting covered under RCM. However there are various case laws where royalty is treated as tax and not consideration for services. Its an unsettled topic. Study various case laws and decide the course of action. Take a certified professional opinion if required
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