Director's Remuneration
GEETHA MEDISETTI (44 Points)
15 July 2020
From which month GST for Director's Remuneration under RCM is applicable.
4 Replies
GEETHA MEDISETTI
(44 Points)
Replied 15 July 2020
I want to know from which month GST is payable under RCM if a company pays Remuneration to directors in case of other other than employer - employee relationship.
annu Goyal
(1102 Points)
Replied 15 July 2020
See RCM is applicable on Director's Remunartion everytime. Since your GST liablity will rise as per TOS under sec 13 of GST act and reference is given below.
Date of payment/
61st day from date of issue of invoice whichever is earlier.
Suppose for April you have made payment on 31.05.2020 and invoice issue 30.04.2020
Now you have to calculate as:
date of payment 31.05.2020
61st day from date of issue of invoice is 30.06.2020
so your TOS is 31.05.2020
In case of supplies in respect of which tax is paid or liable to be paid on reverse charge basis, the time of supply shall be the earlier of the following dates, namely:--
[a] the date of payment as entered in the books of account of the recipient or the date on which the payment is debited in his bank account, whichever is earlier; or
[b] the date immediately following sixty days from the date of issue of invoice or any other document, by whatever name called, in lieu thereof by the supplier
Date of payment/
61st day from date of issue of invoice whichever is earlier.
Suppose for April you have made payment on 31.05.2020 and invoice issue 30.04.2020
Now you have to calculate as:
date of payment 31.05.2020
61st day from date of issue of invoice is 30.06.2020
so your TOS is 31.05.2020
In case of supplies in respect of which tax is paid or liable to be paid on reverse charge basis, the time of supply shall be the earlier of the following dates, namely:--
[a] the date of payment as entered in the books of account of the recipient or the date on which the payment is debited in his bank account, whichever is earlier; or
[b] the date immediately following sixty days from the date of issue of invoice or any other document, by whatever name called, in lieu thereof by the supplier
CA Raj Doshi
(Practising CA)
(8944 Points)
Replied 15 July 2020
Circular No: 140/10/2020 - GST
CBEC-20/10/05/2020 -GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
New Delhi, dated the 10th June, 2020
*Clarification in respect of levy of GST on Director’s Remuneration*
Circular No: 140/10/2020 - GST dated 10.06.2020
It is clarified that the part of Director's remuneration which are declared as *"Salaries‟ in the books of a company and subjected to TDS under Section 192 of the IT Act, are not subject to GST* and not treated as supply in terms of Schedule III of the CGST Act, 2017.
It is further clarified that the part of Director's remuneration which is declared separately *other than "salaries" in the Company's accounts and subjected to TDS under Section 194J of the IT Act as Fees for professional or Technical Services shall be treated as taxable supply for GST and company is liable to discharge the applicable GST on it on RCM basis.*
CBEC-20/10/05/2020 -GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
New Delhi, dated the 10th June, 2020
*Clarification in respect of levy of GST on Director’s Remuneration*
Circular No: 140/10/2020 - GST dated 10.06.2020
It is clarified that the part of Director's remuneration which are declared as *"Salaries‟ in the books of a company and subjected to TDS under Section 192 of the IT Act, are not subject to GST* and not treated as supply in terms of Schedule III of the CGST Act, 2017.
It is further clarified that the part of Director's remuneration which is declared separately *other than "salaries" in the Company's accounts and subjected to TDS under Section 194J of the IT Act as Fees for professional or Technical Services shall be treated as taxable supply for GST and company is liable to discharge the applicable GST on it on RCM basis.*
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