Retainership Fees

This discussion clarifies the Goods and Services Tax (GST) treatment for payments made to company directors. It differentiates between director remuneration and retainership fees, explaining that GST liability, particularly under the Reverse Charge Mechanism (RCM), depends heavily on the director's contractual capacity and employment status. Whole-time directors, often considered employees, may be exempt from GST under Schedule III, while sitting directors providing services not covered by the employer-employee relationship could be subject to RCM. The availability of Input Tax Credit (ITC) is also discussed in relation to these taxable supplies.