Clarification in respect of levy of GST on Director's remuneration.

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..... eking clarification whether the GST is leviable on Director's remuneration paid by companies to their directors. Doubts have been raised as to whether the remuneration paid by companies to their directors falls under the ambit of entry in Schedule III of the Rajasthan Goods and Services Tax Act, 2017 (hereinafter referred to as the RGST Act) i.e. "services by an employee to the employer in the .....

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..... red under section 168 of the RGST Act, following clarifications are issued as below: Leviability of GST on remuneration paid by companies to the independent directors or those directors who are not the employee of the said company 4.1 The primary issue to be decided is whether or not a 'Director' is an employee of the company. In this regard, from the perusal of the relevant provisions .....

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..... e Company, in lieu of remuneration as the consideration for the said services, are clearly outside the scope of Schedule III of the RGST Act and are therefore taxable. In terms of entry at Sl. No. 6 of the Table annexed to notification No. F.12(56)FD/Tax/2017-Pt-I-51 dated 29.06.2017, the recipient of the said services i.e. the Company, is liable to discharge the applicable GST on it on reverse ch .....

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..... taken an employment in the company may be functioning in dual capacities, namely, one as a director of the company and the other on the basis of the contractual relationship of master and servant with the company, i.e. under a contract of service (employment) entered into with the company. 5.2 It is also pertinent to note that similar identification to that in Para 5.1 above) and treatment of th .....

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..... d that the part of employee Director's remuneration which is declared separately other than 'salaries in the Company's accounts and subjected to TDS under Section 194J of the IT Act as Fees for professional or Technical Services shall be treated as consideration for providing services which are outside the scope of Schedule III of the RGST Act, and is therefore, taxable. Further, in te .....

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