Clarification in respect of levy of GST on Director’s remuneration

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....directors. Doubts have been raised as to whether the remuneration paid by companies to their directors falls under the ambit of entry in Schedule III of the Andhra Pradesh Goods and Services Tax Act, 2017 (hereinafter referred to as the APGST Act) i.e. "services by an employee to the employer in the course of or in relation to his employment" or whether the same are liable to be taxed in terms of notification issued in the G.O. Ms.No.256, Revenue (Commercial Taxes- II) Department, Dated 29.06.2017 ( Notification No.13/2017-Central Tax (Rate), dated 28.6.2017) (entry no.6). 2. The issue of remuneration to directors has been examined under following two different categories: (i). leviability of GST on remuneration paid by companie....

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....years immediately preceding the financial year in which he is proposed to be appointed in the said company. 4.2 Therefore, in respect of such directors who are not the employees of the said company, the services provided by them to the Company, in lieu of remuneration as the consideration for the said services, are clearly outside the scope of Schedule III of the APGST Act and are therefore taxable. In terms of entry at Sl. No. 6 of the Table annexed to notification issued in the G.O. Ms. No. 256, Revenue (Commercial Taxes-II) Department, Dated 29.06.2017 (Notification No.13/2017-Central Tax (Rate), dated 28.06.2017), the recipient of the said services i.e. the Company, is liable to discharge the applicable GST on it on reverse charge ba....

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....onal fees and not salary, the same is liable for deduction under Section 194J of the IT Act. 5.3. Accordingly, it is clarified that the part of Director's remuneration which are declared as 'Salaries' in the books of a company and subjected to TDS under Section 192 of the IT Act, are not taxable being consideration for services by an employee to the employer in the course of or in relation to his employment in terms of Schedule III of the APGST Act, 2017. 5.4 It is further clarified that the part of employee Director's remuneration which is declared separately other than 'salaries' in the Company's accounts and subjected to TDS under Section 194J of the IT Act as Fees for professional or Technical Services shall be treated as consider....