RCM on Director Remuneration – Clarification

Category of Supply of Service: Services supplied by a director of a company or a body corporate to the said company or the body corporate.
Supplier of Service: A director of a company or a body corporate
Recipient of Service: The company or a body corporate located in the taxable territory.

As per the above GST under RCM to be paid for any payment made by company to its director.

Following Confusion arises among the industry:

Whether GST is leviable on Director Remuneration by the companies to their directors.
Is GST under RCM is to be paid on all payments made to director.
Is GST under RCM to be paid on payment made to Managing directors or all director.

Due to this Confusion government come with a circular no. 140/10/2020-GST dtd.10^th June 2020 regarding Clarification in respect of levy of GST on Director’s remuneration – Reg.

Analysis of the above clarification is as follows:

S.No.	Nature of Relationship	Applicability of RCM
1	Director Not an Employee of the Company	Yes
2	Managing Director (Employee)	No
3	WTD (Employee)	No
4	Independent Director as per Sec 149(6) of companies Act, 2013	Yes
5	Director (TDS is deducted u/s192 i.e. TDS on Salary)	No
6	Director (TDS is deducted u/s194J i.e. TDS on Professional Service	Yes
7	Contractual relationship of Master and Servant.	No

Name: Mukul Jain

Qualification: CA in Practice

Company: Rohit K.C Jain & Co.

Location: Delhi, New Delhi, IN

Member Since: 30 Mar 2018 | Total Posts: 7