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GST Update: Directors not ‘company employees’, salary/remuneration paid to them taxable under ‘reverse-charge

Blog: NASSCOM Official Blog

The GST Policy Wing, Central Board of Indirect Taxes and Customs (CBIC) recently issued Circular 140/10/2020 – GST dated June 10, 2020 wherein it clarified the applicability of GST on Director’s remuneration paid by companies.

To recap, Rajasthan Authority for Advance Ruling (AAR) in case of M/s. Clay Craft India Private Limited, held that services rendered by the Director to the company for which consideration is paid to them in any head is liable to GST under reverse charge.  Subsequently, Karnataka AAR in the case of Anil Kumar Agarwal, has held that remuneration received by a Director in the capacity of an employee of the Company is outside the purview of GST and any remuneration received by a non-executive Director, not being an employee of the Company, would be subject to GST under reverse charge.

CBIC has now clarified that:

Copy of the Circular is attached for your reference

The post GST Update: Directors not ‘company employees’, salary/remuneration paid to them taxable under ‘reverse-charge appeared first on NASSCOM Community |The Official Community of Indian IT Industry.

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