Is remunerations paid to Directors is liable to RCM??

[Sharad Jain]

Is remunerations paid to Directors is liable to RCM??

AI Summary

Debate on GST: When Does Reverse Charge Mechanism Apply to Director Remuneration? Clarity Needed in Tax Laws. The discussion revolves around whether remuneration paid to company directors is subject to the Reverse Charge Mechanism (RCM) under GST. The consensus among contributors is that if a director is an employee, their salary is not subject to RCM. However, if they provide services in a professional capacity, RCM applies. Several rulings, including those by the Rajasthan and Karnataka Advance Ruling Authorities, have been criticized for misinterpreting the law, leading to confusion. Contributors argue that remuneration paid to directors as employees should not be taxed under RCM, highlighting the need for consistent rulings and clarity in GST laws.