Clarification in respect of levy of GST on Directors Remuneration

Circular No: 140/10/2020 – GST dated 10.06.2020

It is clarified that the part of Director’s remuneration:

• which is declared as “Salaries” in the books of a company and
• is subjected to TDS under Section 192 of the IT Act,

are not subject to GST and not treated as supply in terms of Schedule III of the CGST Act, 2017.

You May Also Like: GST Manuals released by ICAI

Clarification in respect of levy of GST on Directors Remuneration

It is further clarified that the part of Director’s remuneration which is declared separately other than “salaries” in the Company’s accounts and subjected to TDS under Section 194J of the Income Tax Act as Fees for professional or Technical Services shall be treated as taxable supply for GST and company is liable to discharge the applicable GST on it on RCM basis.

Read Circular

You May Also Like: GST credit to be lost if vendors go bankrupt due to covid crisis