RENT PAID TO DIRECTOR

[UDAYKANT PATHAK]

R/S

RENT PAID TO DIRECTOR IN PVT LTD CO IS RCM APLICABLE IN GST AS PER NOTIFICATION 13/2017 OF CGST ACTSUB SECTION 9 (3) OF CGST ACT?

[KASTURI SETHI]

Serial No.6 of Notification No.13/2017-C.T dated 28.6.17 as amended does not talk of renting service. Hence no RCM is applicable in the situation explained.

[DR.MARIAPPAN GOVINDARAJAN]

Item No. 6 of the Notification provides that the services provided by a director to the company is coming under RCM and payable by the company. In my view RCM is applicable.

[Ganeshan Kalyani]

In my view, GST is payable by the company under RCM.

[KASTURI SETHI]

What I want to say if Director supplies service to an individual, no RCM is applicable. If Director supplies service to the said company or body corporate RCM is applicable. If individual provides renting of immovable property service to the Director of a Company, Individual is liable to pay GST.

[KASTURI SETHI]

For additional knowledge on the issue

Reverse charge system not applicable when an individual unregistered person sales goods or provides services not in furtherance of business - Sale of old jewellery by individuals to jewellers not subject to GST under Reverse Charge System

C.B.E. & C. Press Release No. 78/2017, dated 13-7-2017

AI Summary

Does Reverse Charge Mechanism under GST Apply to Rent Paid to Directors? Examining Notification No. 13/2017. A discussion on whether the reverse charge mechanism (RCM) under GST applies to rent paid to a director in a private limited company. One participant argues that Notification No. 13/2017 does not mention renting services, thus RCM is not applicable. Another participant believes RCM applies to services provided by a director to the company. A third participant concurs that the company should pay GST under RCM. Further clarification is given that RCM applies when a director provides services to the company, but not when an individual rents property to a director. Additional information notes that RCM does not apply to sales by unregistered individuals.