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Remuneration to directors

MAHARAJA SELVA ESWAR (285 Points)

12 April 2020

Whether gst applicability and RCM varies between remuneration and salary paid to a director.

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12 Replies

RAJA P M ("Do the Right Thing...!!!") (127058 Points)
Replied 12 April 2020

If the director treat as employee them no need to pay GST under rcm basis...

CS Lalit Rajput (Company Secretary) (33618 Points)
Replied 12 April 2020

In the recent AAR

The services rendered by the Director to the company for which consideration is paid to them in any head is liable to pay GST under RCM (Reverse Charge Mechanism),

Read more at: https://www.caclubindia.com/articles/gst-on-remuneration-paid-to-directors-41004.asp

RAJA P M ("Do the Right Thing...!!!") (127058 Points)
Replied 12 April 2020

If You want to take decision through articles then just go to the another one @ Mr CS Lalit Rajput.,

https://www.caclubindia.com/articles/gst-on-directors-remuneration-41026.asp

CS Lalit Rajput (Company Secretary) (33618 Points)
Replied 12 April 2020

It's just about clarification Mr. Raja. What is given in Latest order of AAR, I stated. I am having several articles too. Before article link, wordings also written there Sir.

RAJA P M ("Do the Right Thing...!!!") (127058 Points)
Replied 12 April 2020

Yes Dear...

As per the above give with GST provisions GST not applicable for paying salary / remuneration to directors as employee...

(May be the latest AAR is wrong or can be apply to higher authorities - it's my view only)

CS Lalit Rajput (Company Secretary) (33618 Points)
Replied 12 April 2020

I am agreed with you sir

even after this AAR

The Question still exists:

Whether all the services provided by the director shall be covered by the RCM provisions or RCM is only restricted to the services provided by a director in the capacity of a director?

RAJA P M ("Do the Right Thing...!!!") (127058 Points)
Replied 12 April 2020

Yeah...

Dear, As per the AAR and it's details says rcm applicable all...

But,
As per GST act (as Mr Rohit Kumar Singh article) Rcm not applicable for director dealt as employee in the company...

CS Lalit Rajput (Company Secretary) (33618 Points)
Replied 12 April 2020

Let's wait for the more clarification from gst department as this is very important topic

RAJA P M ("Do the Right Thing...!!!") (127058 Points)
Replied 12 April 2020

As per my view GST dept can't take voluntary by the matter AAR.

In case the company will be take it to higher officer or next level claim them it can be as salary matter...

Pankaj Rawat (GST Practitioner) (55030 Points)
Replied 12 April 2020

AAR Ruling is applicable only on the petitioner who sought for it.

Moreover the petitioner can further file application to AAAR

Shivam RC (Student) (23683 Points)
Replied 12 April 2020

I agree with Mr Pankaj Sir.

The ruling given by the Rajasthan Authority of Advance Ruling is applicable only on the petitioner i.e. Clay Crafts India Pvt Ltd.

But many Indirect Tax expert is of the view that the ruling is absurd, wrong and does not matches with the Provisions of the GST Law.

As per Para 1 of SCHEDULE III of the CGST Act 2017, Salary is out of the purview of GST ( i.e No Supply ).

And also TDS u/s 192 of the Income Tax Act 1961 is being deducted from the Salary of the Director.

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