TMI BlogClarification in respect of levy of GST on Director's remunerationX X X X Extracts X X X X X X X X Extracts X X X X ..... and Customs, GST Policy Wing vide Circular No. 140/10/2020-GST dated 10 th June, 2020 has issued a clarification in respect of levy of GST on Director's remuneration, in order to ensure uniformity in the implementation of the provisions of law across the field formations, which is annexed herewith. In exercise of powers conferred by section 168 of the Tripura State Goods and Services Tax Act, 2017 (Tripura Act No. 9 of 2017) for the purpose of uniformity in the implementation of the Act it is instructed to follow the clarification issued vide Circular No. 140/10/2020-GST dated 10th June, 2020 by the Department of Revenue, Central Board of Indirect Taxes and Customs, GST Policy Wing. Encl.: Circular No. 140/10/2020-GST. [No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viability of GST on remuneration paid by companies to the independent directors defined in terms of section 149(6) of the Companies Act, 2013 or those directors who are not the employees of the said company; and (ii) leviability of GST on remuneration paid by companies to the whole-time directors including managing director who are employees of the said company. 3. In order to ensure uniformity in the implementation of the provisions of the law across the field formations, the Board, in exercise of its powers conferred under section 168(1) of the CGST Act hereby clarifies the issue as below: Leviability of GST on remuneration paid by companies to the independent directors or those directors who are not the employee of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pendent directors, or those directors, by whatever name called, who are not employees of the said company, is taxable in hands of the company, on reverse charge basis. Leviability of GST on remuneration paid by companies to the directors, who are also an employee of the said company 5.1 Once, it has been ascertained whether a director, irrespective of name and designation, is an employee, it would be pertinent to examine whether all the activities performed by the director are in the course of employer-employee relation (i.e. a contract of service ) or is there any element of contract for service . The issue has been deliberated by various courts and it has been held that a director who has also taken an employment in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hedule III of the CGST Act, and is therefore, taxable. Further, in terms of notification No. 13/2017 Central Tax (Rate) dated 28.06.2017, the recipient of the said services i.e. the Company, is liable to discharge the applicable GST on it on reverse charge basis. 6 It is requested that suitable trade notices may be issued to publicize the contents of this circular. 7. Difficulty, if any, in the implementation of the above instructions may please be brought to the notice of the Board. Hindi version would follow. (Yogendra Garg) Principal Commissioner y.garg@nic.in - Circular - Trade Notice - Public Notice - Instructions - Office orders Tax Management India - taxmanagementindia - taxmanagement ..... X X X X Extracts X X X X X X X X Extracts X X X X
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