Partners Share of Profit

[Rachit Agarwal]

Whether Partners Share of Profit liable to GST?

Whether share of profit would faill within the ambit of salary just like the Commission paid to Whole Time/ Managing Directors as Companies Act.

Regarding the Partner's salary same would fall under Schedule III clarified vide FAQ Point No- 58 and Interest on Capital is exempted by virtue of Notification No- 12/2017 Central Tax Rate dated 28.06.2017

AI Summary

Partners' share of profit not a taxable supply under GST as it is profit distribution, not supply of goods or services.
Partners' share of profit is generally not a taxable supply under GST because it is a distribution of profit, not consideration for supply. The discussion notes prevailing departmental FAQs and rulings supporting non-taxability, while acknowledging alternative characterisations-such as actionable claim treatment or deeming fiction creating employer-employee status-that have produced conflicting AAR decisions. Factual structure and documentation determine the final GST treatment.