11 October 2020
XYZ Ltd is a private Ltd Company doing works contact business. Anil and Sunil hold 100 % shares equally and they are the only directors of the company . Both are directors in other companies also . Other than the directorship in the company Anil and Sunil are engaged in business(proprietary) and are having GST registration. During FY 2019-20 , the company paid them fees for Director Services Rs.10 Lakhs each and deducted TDS u/s 194J of Income Tax Act The company recorded this in March 2020, GSTR 3B return , in serial no 3.1(d) , taxable value 10 Lakhs , CGST 90,000 SGST 90,000. Query Whether the directors Anil and Sunil (both are registered under GST) need to show this in their GSTR1 and GSTR 3B ? If they are required to show in their GSTR 1 and GSTR 3B , in which serial numbers of respective returns , this is to be entered .? It is the company’s liability to pay tax under RCM u/s 9(3) and not the director’s. But in 3.1(a) of GSTR 3B, If you enter a value , tax cannot be zero. In GSTR 1, whether this is to be entered in B2B section , with supply attracting reverse charge?
11 October 2020
RCM applies to the company in respect of fees paid to directors and the company will have to show this in GSTR1 and 3B. In my opinion, the services of director are provided by Anil and Sunil in individual and not part of their registered business. So they would not need to declare the fees received in GST returns. Let's understand it like if Sunil has another 5 businesses registered under GST then the question will come in which registration one would declare this as fee for director's services provided.
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