TaxTMI 
TaxTMI 
Is remunerations paid to Directors is liable to RCM??
Is remunerations paid to Directors is liable to RCM??
08 Apr 2020 
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GST reverse charge on director remuneration applies when directors act as non employee service providers, not for salaried whole time directors.
Whether payment to directors is liable to the reverse charge mechanism depends on whether the director provides services as a non employee/professional or is remunerated as an employee. Salary paid to a director in an employer employee relationship falls under Schedule III exclusion and is not a supply for GST, while fees/remuneration to non executive or independent directors may be taxable under reverse charge. Conflicting advance rulings and tribunal authorities have applied these tests, and administrative clarification addresses liability differences between employee and non employee directors. (AI Summary)
Whether payment to directors is liable to the reverse charge mechanism depends on whether the director provides services as a non employee/professional or is remunerated as an employee. Salary paid to a director in an employer employee relationship falls under Schedule III exclusion and is not a supply for GST, while fees/remuneration to non executive or independent directors may be taxable under reverse charge. Conflicting advance rulings and tribunal authorities have applied these tests, and administrative clarification addresses liability differences between employee and non employee directors. (AI Summary)