SERVICES PROVIDED BY A DIRECTOR OF A COMAPANY

[KESHAV GROVER]

WHETHER SALARY/REMUNERATION PAID TO THE DIRECTORS OF THE COMPANY IN THE NORMAL CIRCUMSTANCES IS LIABLE TO REVERSE CHARGE.

EVERY PRIVATE COMPANY IN THE ORDINARY COURSE OF BUSINESS, GIVES SALARY TO ITS DIRECTORS.

AI Summary

Clarification on GST Reverse Charge: Directors' Salary Exempt if Employer-Employee Relationship Proven; Appointment Letter Crucial A discussion on a forum addressed whether the salary or remuneration paid to company directors is subject to reverse charge under GST. It was clarified that if there is an employer-employee relationship, there is no GST liability. One participant emphasized that simply having a monthly salary on record is not enough to prove this relationship; the appointment letter must include hiring and firing clauses. Various case laws were cited to support different perspectives, highlighting both pro-revenue and pro-assessee viewpoints. The discussion concluded with appreciation for the shared insights.