rcm on services by director

[Madhavan iyengar]

A Managing Director of the Company X has rented out his flat to the Company X for a rent of rs. 15000 per month this flat will be used as a guest house/ training centre by Company X

query

a) whether the Company X is required to discharge GST on RCM basis in above case

[Alkesh Jani]

Sir,

Who is the owner of the flat and who is receiving the rent?

[Madhavan iyengar]

Dear Alkeshji

owner of the flat : Owner of Flat is Managing director of the Company

who is receiving the rent: Managing Director is receiving the rent from company

[Alkesh Jani]

Sir,

In this regards, my point of view is that, the services of Director to the company is Directorship service and renting of immovable property to the company is distinguishable, therefore, no way it can be termed as Directorship services. In the present case, RCM for renting of immovable property is not applicable.

Thanks

[Mahadev R]

I wish to concur with Alkesh Jani

AI Summary

Reverse Charge on rent of immovable property not triggered when a company leases a director's flat for corporate use. The query concerns whether GST under the Reverse Charge Mechanism applies where a Managing Director leases his flat to his company for use as a guest house/training centre. Respondents state the payment is for renting immovable property, distinguishable from directorship services, and conclude RCM for directorship is not applicable to the rental arrangement.