Clarification On levy of GST on Director’s remuneration

CBIC has issued clarification on levy of GST on Director’s remuneration. The issue of remuneration to directors has been examined under following two different categories:

I. Leviability of GST on remuneration paid by companies to the independent directors or those directors who are not the employee of the said company-

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 of the Companies Act, 2013, it can be inferred that:

(a) the definition of a whole time-director under section 2(94) of the Companies Act, 2013 is an inclusive definition, and thus he may be a person who is not an employee of the company.

(b) the definition of „independent directors‟ under section 149(6) of the Companies Act, 2013, read with Rule 12 of Companies (Share Capital and Debentures) Rules, 2014 makes it amply clear that such director should not have been an employee or proprietor or a partner of the said company, in any of the three financial years immediately preceding the financial year in which he is proposed to be appointed in the said company.

Therefore, in respect of such directors who are not the employees of the said company, the services provided by them to the Company, in lieu of remuneration as the consideration for the said services, are clearly outside the scope of Schedule III of the CGST Act and are therefore taxable. In terms of entry at Sl. No. 6 of the Table annexed to 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.

Accordingly, it is hereby clarified that the remuneration paid to such independent 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

II. Leviability of GST on remuneration paid by companies to the directors, who are also an employee of the said company

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 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.

It is also pertinent to note that similar identification (above) and treatment of the Director’s remuneration is also present in the Income Tax Act, 1961 wherein the salaries paid to directors are subject to Tax Deducted at Source under Section 192 of the Income Tax Act, 1961 . However, in cases where the remuneration is in the nature of professional fees and not salary, the same is liable for deduction under Section 194J of the IT Act.

Accordingly, it is clarified that the part of Director’s remuneration which are declared as “Salaries” in the books of a company and subjected to TDS under Section 192 of the IT Act, are not taxable being consideration for services by an employee to the employer in the course of or in relation to his employment in terms of Schedule III of the CGST Act, 2017.

It is further clarified 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 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.

5,145 thoughts on “Clarification On levy of GST on Director’s remuneration

  1. Hey there just wanted to give you a brief heads up and let you know a few of the pictures aren’t loading properly. I’m not sure why but I think its a linking issue. I’ve tried it in two different browsers and both show the same results.

  2. It’s the best time to make some plans for the future and it’s time to be happy. I have read this post and if I could I desire to suggest you few interesting things or advice. Maybe you could write next articles referring to this article. I desire to read even more things about it!

  3. Its like you read my thoughts! You appear to grasp so much about this, such as you wrote the e book in it or something. I feel that you could do with a few percent to power the message home a bit, but other than that, that is excellent blog. A great read. I’ll definitely be back.

  4. fantastic post, very informative. I wonder why the other specialists of this sector don’t notice this. You should continue your writing. I am confident, you’ve a great readers’ base already!

  5. I have really learned result-oriented things through your blog post. Also a thing to I have seen is that normally, FSBO sellers will reject a person. Remember, they’d prefer not to use your solutions. But if anyone maintain a comfortable, professional romance, offering guide and keeping contact for around four to five weeks, you will usually be capable of win a business interview. From there, a house listing follows. Thanks a lot

  6. Thanks for another informative blog. The place else may I am getting that type of information written in such an ideal manner? I’ve a mission that I am simply now operating on, and I have been at the glance out for such information.

  7. Wonderful blog! I found it while browsing on Yahoo News. Do you have any suggestions on how to get listed in Yahoo News? I’ve been trying for a while but I never seem to get there! Thank you

  8. Its such as you read my thoughts! You appear to grasp so much approximately this, like you wrote the ebook in it or something. I think that you can do with a few p.c. to pressure the message house a bit, but other than that, this is fantastic blog. A great read. I will certainly be back.

  9. Great post can make continuous improvement, thanks reveal, the actual build up associated with understanding would be to maintain understanding, interest is actually the start of prosperity.

  10. I mastered more new stuff on this weight-loss issue. 1 issue is that good nutrition is extremely vital whenever dieting. A huge reduction in junk food, sugary food items, fried foods, sweet foods, red meat, and whitened flour products might be necessary. Retaining wastes harmful bacteria, and toxins may prevent goals for fat loss. While specified drugs briefly solve the situation, the horrible side effects are usually not worth it, and they also never give more than a non permanent solution. This is a known undeniable fact that 95 of fad diet plans fail. Thanks for sharing your notions on this blog site.

  11. Thanks for your article on this website. From my personal experience, often times softening upward a photograph may well provide the wedding photographer with a dose of an artsy flare. Sometimes however, that soft clouds isn’t what precisely you had under consideration and can often times spoil a normally good snapshot, especially if you intend on enlarging them.

  12. I’m more than happy to find this website. I need to to thank you for your time due to this fantastic read!! I definitely really liked every part of it and I have you book-marked to look at new information on your site.

  13. An impressive share! I have just forwarded this onto a friend who was doing a little research on this. And he actually ordered me lunch simply because I discovered it for him… lol. So let me reword this…. Thank YOU for the meal!! But yeah, thanx for spending some time to talk about this issue here on your website.

  14. After going over a few of the blog posts on your web site, I really like your technique of writing a blog. I bookmarked it to my bookmark webpage list and will be checking back soon. Please visit my web site as well and let me know your opinion.

  15. It is in point of fact a great and useful piece of info. I am glad that you simply shared this useful info with us. Please keep us informed like this. Thank you for sharing.

  16. I seriously love your website.. Excellent colors & theme. Did you develop this site yourself? Please reply back as I’m hoping to create my own website and want to learn where you got this from or just what the theme is called. Thanks!

  17. I must thank you for the efforts you’ve put in writing this blog. I’m hoping to check out the same high-grade content by you in the future as well. In fact, your creative writing abilities has motivated me to get my own, personal website now 😉

  18. This is the perfect blog for everyone who really wants to understand this topic. You know a whole lot its almost hard to argue with you (not that I personally will need to…HaHa). You definitely put a new spin on a subject that has been written about for ages. Great stuff, just excellent.

  19. I’m impressed, I must say. Seldom do I encounter a blog that’s both equally educative and interesting, and without a doubt, you’ve hit the nail on the head. The issue is an issue that not enough men and women are speaking intelligently about. Now i’m very happy I came across this in my hunt for something relating to this.

  20. I think other web site proprietors should take this site as an model, very clean and great user friendly style and design, as well as the content. You’re an expert in this topic!

  21. Hello, i think that i saw you visited my web site thus i came to 搟go back the prefer?I am trying to in finding things to enhance my website!I guess its ok to use some of your ideas!!

  22. Having read this I thought it was rather enlightening. I appreciate you spending some time and energy to put this article together. I once again find myself personally spending way too much time both reading and commenting. But so what, it was still worthwhile!

  23. Oh my goodness! Incredible article dude! Many thanks, However I am having troubles with your RSS. I don’t know why I can’t join it. Is there anyone else getting similar RSS problems? Anyone that knows the solution will you kindly respond? Thanks!

  24. Everything is very open with a really clear clarification of the challenges. It was definitely informative. Your website is very helpful. Many thanks for sharing!

  25. I would like to thank you for the efforts you’ve put in writing this blog. I really hope to see the same high-grade content by you later on as well. In fact, your creative writing abilities has motivated me to get my very own site now 😉

  26. After looking over a handful of the blog posts on your site, I honestly appreciate your way of writing a blog. I book marked it to my bookmark webpage list and will be checking back in the near future. Please check out my web site too and tell me how you feel.

  27. A fascinating discussion is definitely worth comment. There’s no doubt that that you ought to publish more about this subject, it might not be a taboo subject but typically people don’t discuss these topics. To the next! Cheers.

  28. That is a very good tip especially to those new to the blogosphere. Simple but very precise information… Thank you for sharing this one. A must read post.

  29. I’m pretty pleased to find this web site. I need to to thank you for ones time for this particularly fantastic read!! I definitely appreciated every bit of it and I have you book marked to look at new stuff in your web site.

  30. Greetings! Very useful advice in this particular post! It is the little changes that make the greatest changes. Many thanks for sharing!

  31. Oh my goodness! Incredible article dude! Many thanks, However I am having difficulties with your RSS. I don’t understand the reason why I can’t join it. Is there anybody else having identical RSS problems? Anybody who knows the answer can you kindly respond? Thanks!

  32. I’m amazed, I have to admit. Seldom do I come across a blog that’s both equally educative and interesting, and without a doubt, you’ve hit the nail on the head. The issue is an issue that too few men and women are speaking intelligently about. Now i’m very happy I found this in my search for something concerning this.

  33. Hello there! I simply would like to offer you a big thumbs up for your great information you’ve got here on this post. I am returning to your site for more soon.

  34. Good day! I could have sworn I’ve visited this website before but after looking at many of the posts I realized it’s new to me. Anyways, I’m definitely pleased I stumbled upon it and I’ll be bookmarking it and checking back often!

  35. Having read this I believed it was really enlightening. I appreciate you finding the time and effort to put this short article together. I once again find myself spending a lot of time both reading and leaving comments. But so what, it was still worthwhile.

  36. I have to thank you for the efforts you’ve put in writing this blog. I’m hoping to see the same high-grade blog posts from you in the future as well. In fact, your creative writing abilities has inspired me to get my very own blog now 😉

  37. Thank you for any other excellent article. Where else may just anyone get that type of information in such a perfect approach of writing? I have a presentation next week, and I’m on the search for such information.

  38. Pretty nice post. I just stumbled upon your blog and wanted to say that I have really enjoyed surfing around your blog posts. In any case I’ll be subscribing to your rss feed and I hope you write again very soon!

  39. When I originally commented I seem to have clicked the -Notify me when new comments are added- checkbox and now whenever a comment is added I receive four emails with the same comment. Is there a way you can remove me from that service? Many thanks.

  40. It is in point of fact a nice and useful piece of information. I¡¦m satisfied that you just shared this useful info with us. Please stay us up to date like this. Thank you for sharing.

  41. Wonderful blog! I found it while surfing around on Yahoo News. Do you have any suggestions on how to get listed in Yahoo News? I’ve been trying for a while but I never seem to get there! Appreciate it

  42. It’s difficult to find well-informed people in this particular subject, however, you sound like you know what you’re talking about! Thanks

  43. What’s Happening i’m new to this, I stumbled upon this I’ve found It positively helpful and it has aided me out loads. I hope to contribute & help other users like its aided me. Good job.

  44. Excellent site you have here.. It’s difficult to find high-quality writing like yours these days. I really appreciate people like you! Take care!!

  45. Hi, I do believe this is a great blog. I stumbledupon it 😉 I may revisit once again since i have book marked it. Money and freedom is the greatest way to change, may you be rich and continue to help other people.

  46. I blog often and I genuinely thank you for your information. This article has truly peaked my interest. I will take a note of your blog and keep checking for new information about once a week. I opted in for your RSS feed as well.

  47. Hi! Do you know if they make any plugins to help with SEO?I’m trying to get my blog to rank for some targeted keywords but I’m not seeing very good gains.If you know of any please share. Many thanks!Here is my blog post; Compoise 360X CBD

  48. Howdy, I believe your website may be having web browser compatibility issues.
    Whenever I take a look at your blog in Safari, it looks fine however, if opening in IE, it has some overlapping
    issues. I simply wanted to give you a quick heads up!
    Apart from that, fantastic site!

  49. I seriously love your blog.. Excellent colors & theme. Did you develop this amazing site yourself? Please reply back as I’m hoping to create my own personal site and would love to find out where you got this from or just what the theme is named. Many thanks.

  50. It’s actually a nice and useful piece of info. I’m glad that you simply shared this helpful information with us. Please keep us up to date like this. Thanks for sharing.

  51. Hey, you used to write magnificent, but the last several posts have been kinda boring… I miss your great writings. Past few posts are just a little bit out of track! come on!

  52. When someone writes an post he/she keeps the image of a user in his/her mind that how a user can understandit. Therefore that’s why this article is outstdanding.Thanks!

  53. Just over two years what is plendil medicine for A few months ago, Kailash and I decided to use the platform of the Trust Women conference to launch the End Child Slavery Week campaign on November 19 to put the spotlight on the issue

  54. I’m really loving the theme/design of your blog. Do you ever run into any internet browser compatibility problems? A couple of my blog visitors have complained about my website not working correctly in Explorer but looks great in Safari. Do you have any recommendations to help fix this problem?

  55. I needed to thank you for this fantastic read!! I absolutely loved every little bit of it. I’ve got you book marked to check out new things you post…

  56. Great article and straight to the point. I don’t know if this is in fact the best place to ask but do you folks have any thoughts on where to get some professional writers? Thanks in advance 🙂

  57. Raducanu has also spoken previously of her fond memories of visiting her grandmother, Mamiya, in Bucharest, Romania.«I go back a couple of times a year, stay with her, see her. It’s really nice. I love the food, to be honest,» she said.

  58. That is a really good tip particularly to those fresh to theblogosphere. Simple but very precise information… Many thanks Cash for Cars Toronto sharing this one.A must read post!

  59. Aw, this was an extremely good post. Taking a few minutes and actual effort to create a great article… but what can I say… I put things off a lot and don’t manage to get anything done.

  60. I really appreciate this post. I抳e been looking all over for this! Thank goodness I found it on Bing. You’ve made my day! Thank you again

  61. A motivating discussion is definitely worth comment. There’s no doubt that that you ought to write more on this subject matter, it might not be a taboo matter but typically folks don’t talk about such subjects. To the next! Best wishes.

  62. Oh my goodness! Amazing article dude! Many thanks, However I am encountering problems with your RSS. I don’t know the reason why I am unable to subscribe to it. Is there anybody else getting similar RSS issues? Anyone who knows the answer will you kindly respond? Thanks!

  63. Nice post. I was checking constantly this blog and I’m impressed! Extremely helpful info specially the last part 🙂 I care for such info a lot. I was looking for this certain info for a long time. Thank you and best of luck.

  64. I wanted to compose a word so as to thank you for these nice concepts you are giving out at this site. My considerable internet research has now been paid with professional information to go over with my neighbours. I would assume that most of us readers are very fortunate to live in a fabulous website with many awesome professionals with useful tips. I feel quite lucky to have discovered your weblog and look forward to really more excellent times reading here. Thanks a lot once again for all the details.

  65. I wanted to thank you for this fantastic read!! I certainly loved every bit of it. I have got you bookmarked to look at new stuff you post…

  66. Hello There. I found your blog the use of msn. That is a very neatly written article. I will make sure to bookmark it and come back to read more of your helpful info. Thank you for the post. I will definitely return.

  67. I needed to thank you for this excellent read!! I absolutely loved every little bit of it. I have got you book-marked to look at new stuff you post…

  68. This is a very good tip particularly to those new to the blogosphere. Brief but very accurate info… Appreciate your sharing this one. A must read article!

  69. An outstanding share! I’ve just forwarded this onto a friend who had been conducting a little homework on this. And he actually ordered me breakfast due to the fact that I stumbled upon it for him… lol. So let me reword this…. Thanks for the meal!! But yeah, thanx for spending time to talk about this topic here on your web site.

  70. Spot on with this write-up, I actually believe this site needs far more attention. I’ll probably be back again to see more, thanks for the info!

  71. Yet another thing is that while searching for a good online electronics retail outlet, look for web stores that are constantly updated, retaining up-to-date with the most current products, the most effective deals, and also helpful information on product or service. This will ensure you are getting through a shop that really stays over the competition and give you things to make intelligent, well-informed electronics acquisitions. Thanks for the significant tips I have learned through the blog.

  72. Thanks for sharing your ideas with this blog. Also, a fairy tale regarding the lenders intentions any time talking about foreclosures is that the traditional bank will not have my installments. There is a certain quantity of time that this bank will require payments occasionally. If you are also deep in the hole, they’re going to commonly demand that you pay that payment completely. However, i am not saying that they will not take any sort of installments at all. If you and the standard bank can be capable to work one thing out, the particular foreclosure approach may halt. However, in case you continue to pass up payments underneath the new program, the foreclosures process can just pick up from where it was left off.

  73. You’ve made some really good points there. I looked on the internet for additional information about the issue and found most individuals will go along with your views on this web site.

  74. An interesting discussion is worth comment. I do believe that you ought to publish more about this subject matter, it might not be a taboo subject but generally people do not speak about such topics. To the next! Kind regards!

  75. This is the perfect web site for anyone who wishes to understand this topic. You understand a whole lot its almost tough to argue with you (not that I personally will need to…HaHa). You definitely put a new spin on a topic that has been written about for years. Great stuff, just wonderful.

  76. I must thank you for the efforts you’ve put in writing this blog. I am hoping to see the same high-grade blog posts by you later on as well. In truth, your creative writing abilities has encouraged me to get my own site now 😉

  77. Hi it’s me, I am also visiting this website regularly, this site is actually
    nice and the viewers are actually sharing nice thoughts.

  78. Hello just wanted to give you a quick heads up. The text in your post seem to be running off the screen in Firefox. I’m not sure if this is a formatting issue or something to do with browser compatibility but I figured I’d post to let you know.

  79. I’m not positive where you are getting your info,but great topic. I must spend some time studying much more orunderstanding more. Thank you for fantastic info I was searching for this info for my mission.

  80. Pingback: bahis siteleri
  81. Hello, of course this article is genuinely fastidious and I have learned lot of things from it concerning blogging.
    thanks.

  82. Having read this I thought it was rather informative. I appreciate you finding the time and effort to put this information together. I once again find myself personally spending a significant amount of time both reading and commenting. But so what, it was still worth it.

  83. Heya i am for the primary time here. I found this board and I to find It truly helpful & it helpedme out a lot. I hope to offer something again and aid others like you aided me.Have a look at my blog Essential Nutrition Keto Ingredients

  84. It is perfect time to make some plans for the future
    and it is time to be happy. I have read this post
    and if I could I wish to suggest you some interesting things or tips.
    Perhaps you could write next articles referring to this article.

    I want to read even more things about it!

  85. I like the valuable info you supply for your articles.
    I’ll bookmark your weblog and check once more right here frequently.
    I’m moderately certain I will be told lots of new stuff proper right here!
    Good luck for the next!

  86. I’m extremely pleased to uncover this web site. I need to to thank you for ones time due to this fantastic read!! I definitely appreciated every bit of it and i also have you saved to fav to check out new stuff on your site.

  87. Hi, I do think this is a great web site. I stumbledupon it 😉 I’m going to revisit yet again since I book marked it. Money and freedom is the greatest way to change, may you be rich and continue to help others.

  88. Hey there! I could have sworn I’ve been to this blog
    before but after reading through some of the post I realized it’s new to
    me. Anyways, I’m definitely happy I found it and I’ll be bookmarking and checking
    back frequently!

  89. Thank you for another wonderful post. Where else may anyone get that type of information in such aperfect manner of writing? I’ve a presentation subsequent week, and I am at the look for such information.

  90. Can I simply say what a comfort to discover someone that genuinely knows what they are discussing online. You actually understand how to bring a problem to light and make it important. More people must read this and understand this side of your story. I can’t believe you are not more popular because you certainly possess the gift.

  91. I’m really enjoying the design and layout of your blog. It’s a very easy
    on the eyes which makes it much more enjoyable for me to come here and visit more often. Did you hire out a developer to create your
    theme? Fantastic work!

  92. Having read this I thought it was rather enlightening. I appreciate you taking the time and effort to put this article together. I once again find myself spending a significant amount of time both reading and posting comments. But so what, it was still worthwhile!

  93. I don’t even know how I finished up here, but I assumed this post wasgreat. I do not know who you might be but certainly you’re going to a famous blogger should you aren’t already.Cheers!

  94. This is the right blog for anybody who hopes to find
    out about this topic. You realize so much its almost tough to argue with you (not
    that I actually will need to…HaHa). You certainly put a new spin on a topic that’s been discussed for years.
    Great stuff, just great!

  95. I will immediately seize your rss as I can not to find your email subscription hyperlink or newsletter service. Do you’ve any? Please permit me recognize in order that I may subscribe. Thanks.

  96. It is the best time to make some plans for the future and
    it’s time to be happy. I have learn this publish and if I may just
    I wish to suggest you few fascinating issues or advice.
    Maybe you could write next articles referring to this article.
    I want to read even more things approximately
    it!

  97. Amazing issues here. I’m very glad to see your article.Thanks a lot and I’m looking ahead to touch you.Will you please drop me a e-mail?

  98. Simply want to say your article is as amazing.
    The clarity in your publish is just great and that
    i could suppose you’re knowledgeable on this subject.
    Well with your permission let me to clutch
    your feed to keep updated with impending post. Thanks one million and please continue the gratifying work.

  99. Hello! I just wanted to ask if you ever have
    any problems with hackers? My last blog (wordpress) was
    hacked and I ended up losing a few months of hard work due to no data backup.
    Do you have any methods to prevent hackers?

  100. A motivating discussion is definitely worth comment. I believe that you ought to write more on this issue, it might not be a taboo matter but typically people don’t discuss such topics. To the next! Cheers!

  101. Having read this I believed it was very enlightening. I appreciate you taking the time and effort to put this article together. I once again find myself spending a lot of time both reading and leaving comments. But so what, it was still worth it.

  102. Incredible! This blog looks just like my old one! It’s on a completely different subject
    but it has pretty much the same layout and design. Excellent choice of colors!

  103. An outstanding share! I have just forwarded this onto a coworker who had been doing a little research on this. And he in fact bought me dinner because I stumbled upon it for him… lol. So allow me to reword this…. Thanks for the meal!! But yeah, thanks for spending some time to talk about this issue here on your site.

  104. Thanks , I’ve recently been searching for information approximately this subject for
    a long time and yours is the greatest I’ve found out till now.
    But, what in regards to the conclusion? Are you certain in regards
    to the source?