supply to related party

[Kaustubh Karandikar]

Club Membership Fees paid by XYZ Ltd. on behalf of the Director of the company. The director is not on the payroll of the company. Is XYZ required to pay GST on it under the category of ‘Services provided to related party without any consideration’?

[KASTURI SETHI]

XYZ Ltd. is just working for and behalf of the Director of the Company. He is not playing the role of intermediary. Related person issue does not come into picture.

AI Summary

Services to related party: company-paid club membership for a director treated as payment on behalf, not related party supply. The question asks whether company-paid club membership fees for a director not on payroll amount to a taxable supply to a related party without consideration. The reply states the company made the payment on behalf of the director, he is not an intermediary, and therefore the related person treatment does not arise, indicating the transaction is viewed as an arrangement for the director's benefit rather than a distinct related party supply.