Circular dated 10.06.20: Clarification on GST applicability on Director remuneration

Summary:

1.) Remuneration paid to Director who is Independent director and not in the Employment of the Company –
Then Such service provided By ED or other director who is not in the employment in the company is outside the purview of Para 1 to Schedule III to CGST Act hence Taxable under reverse charge basis.

2.) Remuneration to Director who is in the Employment of the Service (i.e. Employer – Employee Relationship for contract of service)

i) If the Company is treated such Remuneration under the head Salary in BOA and deducting TDS u/s 192 of IT Act, 1961 then Such Payment of Remuneration is NOT LIABLE FOR GST UNDER RCM.

ii) If company is treated such Remuneration in BOA as a PROFESSIONAL Service (payment other than salaries) and deducting TDS U/s 194J then GST IS PAYABLE on RCM.

The Circular can be read as under :

GST onDirector Renumeration