RCM on Specified Services received by Company

Thank you Dhirajlal Rambhia ji,

Reply is very clear, I too had similar query, one point I am confused about, please guide:

Director Salary, does it fall under Independent director service, does it attracr RCM?

The remuneration paid to Directors is issued only on receiving approval from shareholders and the Board of Directors. A director can be executive, non-executive, Managing Director, Independent Director, Small Shareholder Director, Women Director, Additional Director, or Alternate Director depending upon their responsibility towards the company.

CBIC has clarified the applicability of GST on director’s remuneration vide CGST circular no. 140/2020 dated 10th June 2020. In the circular, the criteria to classify a director as employee or not is clearly outlined. If the services are not classifiable as employer-employee relationship, then GST is levied on such remuneration. In that case, company (service recipient) will be liable to deposit the GST dues on reverse charge basis with the government as per Notification No. 13/2017.