RCM Applicability on Remuneration Paid to Directors

RCM Applicability on Remuneration Paid to Directors


The Questions and Ruling is as follows :

2. The Applicant is a Private Limited Company and is registered under the Goods and Services Act, 2017. The applicant has sought advance ruling in respect of the following question :

RCM Applicability on Remuneration Paid to Directors

a) Whether the expenses incurred by the Staff members on behalf of the Company exceeding Rs.5000-00 a day and then reimbursed periodically are liable to tax.

b) Whether RCM is applicable on remuneration paid to the Directors.


1. The amounts paid to the employees of the applicant company as reimbursement of expenses incurred by them in the course of employment of the applicant company are not liable to tax under the provisions of the Goods and Services Tax Act, 2017 as the transaction of the services supplied by a supplier to the employee and paid by the employee is liable to tax after 30.09.2019 .

2. The remuneration paid to the Director of the applicant company is liable to tax under reverse charge mechanism under sub­ section(3) of section 9 in the hands of the applicant company as it is covered under entry no.6 of Notification No.13/2017 – Central Tax (Rate) dated 28.06.2017.

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