SERVICES PROVIDED BY DIRECTOR OF COMPANY TO COMPANY IS UNDER REVERSE CHARGE OR NOT

[GIRISH LOKHANDE]

WE ARE RECEIVING SERVICE OF COMMERCIAL PROPERTY RENTED BY DIRECTOR OF COMPANY. REVERSE CHARGE NOTIFICATION NO. 13/2017 DT. 28-6-17 SL NO. 6 SAYS

(2) Category of Supply of Services :Services by the Director: Services supplied by a director of a company to the said company

(3) Supplier of Service :A director of a company

(4) Recipient of service :A company located in the taxable territory.

I JUST REMOVED BODY CORPORATE WORD FROM ABOVE & FOUND THAT SERVICES BY DIRECTOR IS UNDER REVERSE CHARGE & RECIPIENT OF SERVICE IS COMPANY

NATURE OF SERVICE NOT SHOWN MEANS ANY SERVICE GIVEN BY DIRECTOR TO THE COMPANY WHICH INCLUDES RANT OF COMMERCIAL PROPERTY FOR COMPANY USE

I READ SOME COMUNNICATION THAT RENT IS NEVER UNDER REVERSE CHARGE IT IS ALWAYS IN FORWARD CHARGE & DIRECTOR IS TO PAY TAX IF HIS TURNOVER IS MORE THEN 20 LACS.

IN MY OPENION IF RENTING OF IMMOVABLE PROPERTY BY DIRECTOR, THEN ONLY IT IS UNDER REVERSE CHARGE. IF RENTING ERVICE GIVEN BY ANY OTHER PERSON THEN GST IS PAYABLE IF HE IS ELIGIBLE TO PAY.

EXPERT OPINION IS REQUIRED.

REGARDS

AI Summary

Reverse charge on director-provided services: company may face GST liability if director's supply is characterised as services.
Whether payments by a company to its director for use of commercial premises fall under the reverse charge depends on whether the payment is for services by a director to the company or a separate lease by the director in his personal capacity; if characterised as director's services, the company may be liable under reverse charge, while if a private lease, taxability hinges on the supplier's registration and statutory classification, creating uncertainty over recipient liability, Input Tax Credit and compliance risk.