TaxTMI 
TaxTMI 
2021 (1) TMI 849
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....6 A, Road No. 1-D, V.K.I. Area, Jaipur, Rajasthan 302013 (hereinafter also referred to as 'the Appellant') against the Advance Ruling No. RAJ/AAR/2019-20/33, dated 26.02.2020 = 2020 (4) TMI 228 - AUTHORITY FOR ADVANCE RULING RAJASTHAN. Brief Facts of the case 3.1 The appellant, i.e. M/s. Clay Craft (India) Pvt. Ltd., F-766-A, Road No. 1-D, VKI Area, Jaipur (hereinafter also called as the "appellant") are engaged in the manufacture of bone China Crockery, Transfer Sheet Decalcomania, other Utensils Item and Moulds & Die falling under chapter heading No. 69111011, 49081000, 84801000 & 84801000 of the Tariff. They are registered with Goods & Services Tax department and are having GST registration No. 08AAACC6866DIZO. 3.2 Presently Board of Directors of the appellant company consists of six (6) directors. It has been submitted that all the above-mentioned Directors are performing all the duties and responsibilities and duties as required under the laws. However along with that these all directors are also working in the company at different level of management in the company and each one of them is holding charge of procurement of raw material, production, quality checks, dispatch, ....
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....s Appeal has, inter-alia, mentioned the following grounds of Appeal: 4.1 The Authority for Advance Ruling has erred in deciding that the consideration paid to the Directors by the applicant company will attract GST under reverse charge mechanism as it is covered under entry No. 6 of Notification No. 13/2017 Central Tax (Rate) dated 28.06.2017 issued under Section 9(3) of the CGST Act, 2017. 4.2 It is submitted that in the impugned ruling of Authority of Advance Ruling, it has been ruled that the "consideration" paid to Directors would attract GST under reverse charge mechanism. 4.3 However the point submitted by the appellant was that whether the salary paid to the Directors who are working whole time in the company and were paid salary under a contract of employer employee, would attract GST under Reverse Charge Mechanism (hereinafter also called as the RCM). 4.4 It is submitted that Directors of the appellant company are working whole time for the company and their employment has been effected under a service contract of employer employee. Therefore they are in all practical purposes employee of the company. As submitted supra, the company have been deducting TDS and EPF from....
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....ervice Recipient of Service (1) (2) (3) (4) 6 Services supplied by a director of a company or a body corporate to the said company or the body corporate. A Director of a company or a body corporate The company or a body corporate located in taxable territory 4.8 From the above provision it is amply clear that both in Service tax as well as in GST laws the provision for reverse charge payment of tax are similar therefore the intention of the legislation was same under GST provisions as it was under Service Tax laws. 4.9 The appellant relies in the case of Rent Works India (P) Ltd. Vs Commissioner of C. Ex., Mumbai 2016(04) LCX0103 Tri. Mumbai = 2016 (5) TMI 786 - CESTAT MUMBAI wherein the Hon'ble Tribunal has held as under: 'Para 7. On perusal of the agreement with Mr. Alan Van Niekerk, we find that the said agreement is between appellant and one Mr. Alan Van Niekerk for rendering the services to appellant on the management of market and exclusive services. The said agreement provides for payment of an amount as monthly remuneration of Mr. Alan Van Niekerk and as also additional amount at the discretion of the board as percentage to Alan Van Niekerk. It is seen from t....
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....of Advance Ruling about the salaries paid by the appellant company to their whole time Directors being chargeable to GST under Reverse Charge mechanism is faulty one and need to be reversed. 4.12 Further in respect of RCM under erstwhile Service Tax regime, circular No. 24/2012 dated 09.08.2012 was issued, wherein it was stated that: "The Finance Act, 2012 has introduced Service Tax which is applicable to anyone who provides a service not covered under the negative/exempted list and if the value of the service annual revenue is more than Rs. 10 Lakh. The Non-Whole Time Director of the Company are presently not covered under the exempted list and as such, the sitting fee/commission payable to them by the company is liable to service tax." 4.13 The above circular makes it clear that only in respect of payments made to non-whole time Directors (who are not director employee of the company working regularly for the company), service tax liability arise to the company. 4.14 There is no difference in legal provision for the taxability in respect of directors of a company under GST and Service Tax laws therefore the interpretation / rulings and clarification issued under the Service ....