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Remuneration paid to the independent directors or those directors who are not the employee of the appellant is taxable on reverse charge basis.

Levy of GST— The present appeal has been filed against the advance ruling by AAR Rajasthan, as per appellant, the Authority for Advance Ruling has erred in deciding that the consideration paid to the Directors by the applicant company will attract GST under reverse charge mechanism as it is covered under entry No. 6 of Notification No. 13/2017 Central Tax (Rate) The appellant had requested for Ruling on leviability of GST under Reverse Charge Mechanism (RCM) on the salary paid to Director of the company who is paid salary as per employment contract, after deduction of TDS as well as PF. The AAR has pronounced that the consideration paid to the Directors by the applicant company will attract GST under reverse charge mechanism and the situation will remain the same if the director is also a part time director in another company. Held that—The part of employee Director’s remuneration which is declared separately other than “salaries” in the appellant’s accounts and subjected to TDS under Section 194J of the IT Act as Fees for professional or Technical Services shall be treated as consideration for providing services which are outside the scope of Schedule III of the CGST Act, and is therefore, taxable and in terms of notification No. 13/2017 - Central Tax (Rate) dated 28.06.2017, the recipient of the said services i.e. the appellant, is liable to discharge the applicable GST on it on reverse charge basis.