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GST applicability on Rental income to Director of company

JIGAR SHAH

One of our clients is a private limited company; it has given rent and interest to its director. Let's say the interest income was ₹ 15 lakhs and Rental Income was ₹ 6 lakhs. Further, he has rental income from outside party of ₹ 2 Lakhs.

What will be the total turnover under GST for the director? Whether interest income will be included to compute total turnover?

Whether GST will be charged on rental income of ₹ 6 lakhs or it will fall under reverse charge mechanism?

If total turnover will be ₹ 23 lakhs (15+6+2) whether GST will be payable on ₹ 2 lakhs and ₹ 6 lakhs GST will be paid by company under reverse charge mechanism?

Director's Rent to Company Subject to GST; Turnover Exceeds 20 Lakhs Triggering Tax Obligations A private limited company pays rent and interest to its director, raising questions about GST applicability. The total turnover, including external rental income, is 23 lakhs. Interest income is nil-rated, while commercial property rent is taxable. If turnover exceeds 20 lakhs, GST applies. The director, registered under GST, must charge GST on rent to the company, not under reverse charge. Salary received by the director is not considered a supply of goods or services. The discussion highlights that services provided by a director in a personal capacity are subject to forward charge, not reverse charge, except for director-specific roles. (AI Summary)
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