Explain GST on directors remuneration with example

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9 Points Posted on 10 April 2020
GST on Directors remuneration
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On 10 April 2020 at 12:09 Report
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This discussion clarifies the applicability of GST on director remuneration, particularly concerning Reverse Charge Mechanism (RCM). While RCM is generally applicable, there's a distinction made for remuneration paid to whole-time directors, where GST might not apply due to an employer-employee relationship. However, a Rajasthan AAR ruling suggests GST is applicable to director remuneration, even for working directors, though the scope of such rulings is limited.

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"Do the Right Thing...!!!"
128157 Points Posted on 10 April 2020
Rcm applicable on director's remuneration. GST rate @ 18%.
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On 10 April 2020 at 12:38
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GST Practitioner
55067 Points Posted on 10 April 2020
No RCM is applicable on remuneration paid to Whole time director.
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On 10 April 2020 at 13:00
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"Do the Right Thing...!!!"
128157 Points Posted on 10 April 2020
Dear Mr Pankaj Rawat Ji.,


What about Your reply against AAR by Rajasthan bench of the AAR, Clay Craft India Pvt Ltd 

https://m.economictimes.com/news/economy/policy/remuneration-paid-to-directors-to-attract-gst-aar/articleshow/75030502.cms
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On 10 April 2020 at 13:41
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Consultant
1891 Points Posted on 11 April 2020

RCM is applicable in case of remuneration paid to directors. Company was liable to pay GST. 

Further, its opined that since there is employer employee relationship between company and directors hence GST is not applicable in case of working directors.

However the Rajasthan bench of AAR has said that Remuneration paid to directors to attract GST. 
 

 

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On 11 April 2020 at 10:43
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GST Practitioner
55067 Points Posted on 16 April 2020

Dear Mr. Raja ji

yes you are correct ....but  you yourself know the ruling is not correct &moreover applicability of ruling is limited to who sought application for the same .

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On 16 April 2020 at 11:32
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Finance
31 Points Posted on 23 July 2020

https://youtu.be/qk0kj5U-5RM

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On 23 July 2020 at 04:42

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