TaxTMI 
TaxTMI 
A PRIVATE LTD COMPANY'S DIRECTOR CONSTRUCTED HIS RESIDENCE HOUSE. THE LAND, PLAN APPROVAL AND EVERY THING IN THE NAME OF HIM. BUT THE CONTRACTOR'S PAYMENT IS MADE BY COMPANY. HENCE, GST DEPARTMENT ASKED TO PAY GST @ 18% INSTEAD OF 12%. WHETHER IS IT CORRECT OR NOT. PLEASE GUIDE
WORKS CONTRACT
RV PERUMAL
Director's Home Construction Faces Higher GST Rate; Company Deemed Service Receiver; Check Notification No. 12/17-CT(R) for Rates A director of a private limited company constructed a residence with all legal approvals in his name, but the company paid the contractor. The GST department demanded an 18% GST rate instead of 12%. A respondent clarified that the company, as the de facto service receiver, is liable for the higher tax rate. The payment was recorded as a loan to the director, not as a company expense. It was suggested to check Notification No. 12/17-CT(R) for applicable tax rates, which might allow for a different rate under specific conditions. (AI Summary)