Amount paid to Director

[Kaustubh Karandikar]

Amount paid by XYZ Pvt. Ltd. to Mr. PQR (Proprietor – ABC) towards Repairs & Service Charges and Labour Charges and ABC paid GST on it. Mr. PQR is also a director of XYZ Pvt. Ltd. Any GST implication to XYZ Pvt. Ltd. since PQR is director of XYZ Pvt. Ltd. and proprietor of ABC?

AI Summary

XYZ Pvt. Ltd. not liable for GST under Reverse Charge Mechanism for services by director-proprietor Mr. PQR. XYZ Pvt. Ltd. paid Mr. PQR, a director and proprietor of ABC, for repairs and service charges, with GST paid by ABC. The main concern is whether XYZ Pvt. Ltd. has any GST liability under the Reverse Charge Mechanism (RCM) due to Mr. PQR's dual roles. Responses indicate no RCM liability for XYZ, as the services were provided by Mr. PQR as a proprietor, not as a director. Transactions between XYZ and ABC should be at Open Market Value (OMV) due to their related-party status, and the recent circular clarifies no RCM applies in this context.