GST Directors

[Madhavan iyengar]

A is a director in many companies and receives directors fees he does not render any other services his total directors fees exceeds rs. 40 lacs is A required to take registration under GST

since his services as a director are covered under reverse charge and he does not render any other services he only receives director fees

[Ganeshan Kalyani]

Registration is not required for the service supplied is covered under reverse charge notification.

[KASTURI SETHI]

I support the view of Sh.Ganeshani Kalyani Ji.

[KASTURI SETHI]

W.r.t. your query, it is very crucial to ascertain whether Director and Company have employer-employee relationship or not . For this purpose go through the following case law:

2019 (4) TMI-1537-CESTAT Kolkata in the case of Brahm Alloy Ltd. Vs. Commissioner, CGST & C.Excise, Durgapur.

[Madhavan iyengar]

Kasturi sir

one more clarification:

The Director is only a ordinary/ sitting director and not an employee in many companies and he is being paid director fees in many companies. the total fees received exceeds rs. 50 lacs. since these are liable for reverse charge only. and the receipient company of director services pays the RCM

The Concerned Director does not have any other income other than director fees

Now in above case is Director required to take GST Registration

[KASTURI SETHI]

Sh. Madhavan Iyengar Ji,

In the situation explained by you reply remains the same. Director is not required to obtain registration as GST is to be paid by the Company who is receiving service from Director. RCM is applicable to the Company receiving service from Director.

How doubt is created ?

[Madhavan iyengar]

kasturi sir got it and moreover for purpose of registration under gst the aggregate turnover excludes turnover on which rcm is applicable so effectively no need for regn where director has fees exceeding rs. 40 lacs which is liable for rcm

[Madhavan iyengar]

kasturi sir

in the previous reply by me there is an error as per 2(6) aggregate turnover excludes inward supplies so i stand corrected.

[KASTURI SETHI]

Sh.Madhavan Iyengar Ji,

O.K. Thanks for reverting.

AI Summary

Reverse charge for director fees - recipient pays GST, so a non-employee director typically need not register for GST. Services supplied by a non-employee director that are covered by the reverse charge mechanism attract GST liability on the recipient company, so the director supplying only such services is not required to obtain GST registration; aggregate turnover for registration excludes inward supplies, and the employee-versus-director characterization remains relevant to liability.