Whether RCM is applicable on rent paid to a director of the company

[Manoj Kumar]

Dear Professionals,

Whether rent paid to a director of company is covered under reverse charge mechanism as per Notification 13/2017 (CTR).

The notification says for "services provided by a director of a company to the said company " GST is liable to be paid under RCM by the company.

The notification do not state anything about whether services provided only in his capacity as a director or excluding services provided in his individual capacity. Whether services covered only for remuneration or of all nature.

Can we be very sure that RCM is not at all applicable in case of rent paid to director and dept will also not question in future period?

Or can the company take a stand to pay GST on rent under RCM and still win the legal battle.

Can the director be rest assured that no notice to pay tax on FCM be issued to him?

Request the experts guidance.

AI Summary

Reverse charge on rent to director applies only for services in director capacity; individual rental may fall outside RCM.
Reverse charge applies to services provided by a person in the capacity of a company's director to that company under the specified notification entry; services provided by the director in his individual capacity, such as renting immovable property, fall outside that director-service entry and thus are not covered by RCM. Separate rules determine whether the director must charge GST under forward charge based on his registration status and whether renting residential dwellings to a registered person brings recipient-side RCM liability under a distinct notification entry. Advance ruling may be sought for certainty.