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

Reverse charge mechanism may render the company liable for GST on director-supplied services, subject to scope of covered services. Whether GST under the reverse charge mechanism applies to rent paid to a director is contested: one view treats services by a director to the company as subject to reverse charge payable by the company; another view observes the cited entry does not expressly cover renting services so RCM would not apply. Contributors distinguish supplies to a body corporate (RCM may apply) from supplies between individuals (RCM not applicable and supplier liable).