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2019 (10) TMI 793 - AAR - GSTLevy of GST - expenses incurred by the Staff members on behalf of the Company exceeding ₹ 5000-00 a day and then reimbursed periodically - Applicability of Reverse charge mechanism on remuneration paid to the Directors. HELD THAT:- The amount paid by the employee to the supplier of service is covered under the term “consideration” as if it is paid by the applicant himself for the services received by them on behalf of the company. This amount reimbursed by the applicant to the employee later on would not amount to consideration for the supplies received as the services of the employee to his employer in the course of his employment is not a supply of goods or supply of services and hence the same is not liable to tax. Remuneration to the Directors paid by the applicant - HELD THAT:- The question before us is not whether this service is taxable or not, but whether this supply of services is liable to tax under reverse charge mechanism. The services provided by the Directors to the Company are not covered under clause (1) of the Schedule III to the Central Goods and Services Tax Act, 2017 as the Director is not the employee of the Company. The consideration paid to the Director is in relation to the services provided by the Director to the Company and the recipient of such service is the Company as per clause (93) of section 2 of the CGST Act and the supplier of such service is the Director. Reverse Charge Mechanism - HELD THAT:- In the present case, the applicant is the company and is located in the taxable territory and the Directors’ remuneration is paid for the services supplied by the Director to the applicant company and hence the same is liable to tax under reverse charge basis under section 9(3) of the Central Goods and Services Tax Act, 2017.
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