GST ON DIRECTOR REMUNERATION

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student
82 Points Posted on 12 June 2020
Gst is applicable on director remuneration but we haven't paid any gst till now. What are the consequences?. Please explain.
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On 12 June 2020 at 15:08 Report
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This discussion clarifies the applicability of GST on director remuneration. While GST is generally applicable, it's exempt if treated as salary and TDS is deducted under Section 192. For payments like sitting fees, if GST wasn't paid under RCM, the primary consequence is an 18% interest charge. Input Tax Credit (ITC) can be availed, but there are time limits for claiming it, particularly for older financial years, which may involve potential litigation.

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Consultant
1891 Points Posted on 12 June 2020

The CBIC has clarified vide circular dated 10.06.2020 that GST will not be applicable on director's remuneration if the consideration paid is recorded as salary in the book of accounts of the Company and TDS have been deducted u/s 192. 

So please check the applicability 

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On 12 June 2020 at 15:15
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student
82 Points Posted on 12 June 2020
For example sitting fee paid to independent directors for FY 17-18 Rs. 85000/- & FY 18-19 Rs. 250000/-. I did not paid gst under RCM til now. What are the consequences? Is there any interest or penalty? If yes what is the interest rate? If should I pay now can i take the same as input credit?
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On 12 June 2020 at 15:27
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Designation
771 Points Posted on 12 June 2020
No penalty.. only interest will be levied at 18% and ITC can be availed.
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On 12 June 2020 at 15:36
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student
82 Points Posted on 12 June 2020
A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the due date of furnishing of the return under section 39 for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier
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On 12 June 2020 at 15:48
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Designation
771 Points Posted on 12 June 2020
Agreed. it's litigative but can surely be challenged as I have personally dealt with these scenario.Authorities at lower level may won't allow.
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On 12 June 2020 at 15:51
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student
82 Points Posted on 12 June 2020
So i cant take the ITC on such payment for the FY 17-18 & 18-19 but I can take it for FY 19-20.
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On 12 June 2020 at 15:55
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Designation
771 Points Posted on 12 June 2020
With respect to FY 2019-20, there exists no doubt, you can avail till September 2020. For previous FY, you can avail subject to possibility of litigation.
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On 12 June 2020 at 15:58
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student
82 Points Posted on 12 June 2020
Thanks a lot for responding...
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On 12 June 2020 at 16:08
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4215 Points Posted on 15 June 2020
Yes it is hold good
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On 15 June 2020 at 21:41

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