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Is GST applicable on monthly salary drawn by director?

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Kenil Satra

Trainee

50 Points Posted on 02 April 2021

A private limited company has three directors. All three are share holders cum directors of the company. My questions are:

1) Is GST applicable on the monthly salary paid to these directors by the company? If yes, then at what rate.

2) If, GST is applicable then should the company also deduct TDS on the monthly salary?

Thanks in advance

Replies (3)

Quick Summary

This discussion clarifies whether Goods and Services Tax (GST) is applicable on the monthly salary paid to directors of a private limited company. Generally, GST is not levied on salaries paid under an employer-employee relationship, including for directors. However, GST may be applicable on other forms of remuneration like sitting fees, particularly for part-time directors. The thread also touches upon the related question of TDS deduction in such cases.

GST is not leviable in case of salary paid to directors since it is an employer employee relationship but GSt is payable on sitting fees or any other remuneration paid to directors.