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Retainership Fees

Anshuman Basu (account -GST) (1556 Points)

05 May 2020

Mr Roy is a director (URD) of the GST Registered company M/s XYZ. He is received Rs 150000/- as Director Remuneration and Rs 50000/- Received as Retainership Fees From Company.

Now Question is

1. What are the GST Treatment of Director Remuneration and Retainership Fees in point of M/s XYZ?

2. Is both service are fall in RCM?

3.Can the company claim ITC?
please help

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4 Replies

CA Altamush Zafar (GST Consultant) (15986 Points)
Replied 05 May 2020

With respect to taxability it highly depends on the contractual terms as to in which capacity is the person giving the services.
Where tax is liable to be paid under RCM then ITC is available in full provided the fact that the outward supplies should be taxable.

Vinitha (Student) (34 Points)
Replied 06 May 2020

It is firstly important to know if the Director is a whole time employee and as to whether he is enjoying all the benefits applicable to an employee as per the employment contract.

If he is a whole time director den he is clearly an employee of the company. In such case there is employer employee relationship. GST may not b liable on the fees paid by the employer to Director.

So, it is imperative to first understand the contract between Director and the company

Pankaj Rawat (GST Practitioner) (55057 Points)
Replied 06 May 2020

If whole time Director : No GST liability as cover under Schedule III

If Sitting Director : GST is applicable on RCM

CA Akshay Hiregange (Partner - Audit & Assistance) (4825 Points)
Replied 06 May 2020

Services provided in the capacity of the director but not covered under Schedule III (employer-employee relationship) can be considered for RCM liability. Reference to TDS u/s 192 can be made.