A pvt company has 15 Lakhs annual turnover and not required to have GST registration as per exemption limit. However, payment made to the director u/s 194J for professional services. This comes under reverse charge mechanism of GST. Please reply if GST registration required in this case. Thank you.
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Is gst registration required for rcm though turnover within exemption limit?
Replies (5)
yes. For paying RCM there is no threshold limit. please correct me if i am wrong.
As per section 24(iii) you will be required to take compulsory registration. My suggestion is make payment under 192 so that you can avoid this situation.
| Originally posted by : Padmanathan Kv | ||
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My suggestion is make payment under 192 so that you can avoid this situation. |  |
Thanks for reply. Can you please elaborate how payment to director can be made u/s 192? What changes need to be done in director designation, resolution etc.?
Basis your facts, you are liable to get registered irrespective of threshold limit. If you can look for changing the status of director considering his functions, provisions as per Companies Act, 2013 and substantiate/ justify it by deducting tax u/s 192, you can skip the GST registration since RCM liability under GST triggers only in case of non-executive directors.
yes make him as a Whole time Director, document a letter of appointment etc, deduct TDS under salary u/s 192, apply labour regulations like PF,ESI etc. Then the transaction would not be taxable as it is employee to employee ( Schedule III).
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