GST Council makes important clarification on RCM applicability on services by Director:

GST Council makes important clarification on RCM applicability on services by Director Many Important decisions were taken in the 50th GST Council meeting held on 11th July 2023, under the leadership of our honorable Minister of Finance and Corporate Affairs, Mrs. Nirmala Sitaraman. GST Council vide press release dated 11th July 2023 has clarified that services supplied by a director of a company to the company in his private or personal capacity to the company or body corporate are not taxable under Reverse Charge Mechanism (RCM). Only those services supplied by a director of a company or body corporate, which are supplied by him as or in the capacity of director of that company or body corporate shall be taxable under RCM in the hands of the company or body corporate under notification No. 13/2017- CTR (Sl. No. 6) dated 28.06.2017. 

We have tried to cover some situations:

Payment made to Director	GST Applicable	RCM Applicable
Salary	No	No
Rent Commercial Property	Director is Registered: Yes	No
Rent Commercial Property	Director is Not Registered: No	No
Sitting Fees	Director is Registered: No	Yes
Sitting Fees	Director is Not Registered: No	Yes
Professional Fees (Service provided in personal capacity)	Director is Registered: No	No
Professional Fees (Service provided in personal capacity)	Director is Not Registered: No	No

Applicability:

Since this is a clarificatory amendment, it should be applicable retrospectively, i.e., w.e.f., 1st July 2017.