CA Pratibha Goyal | Jul 12, 2023 |
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.
| 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 |
Since this is a clarificatory amendment, it should be applicable retrospectively, i.e., w.e.f., 1st July 2017.
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