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GST ON DIRECTOR REMUNERATION

kartheek kumar reddy (student) (82 Points)

12 June 2020

Gst is applicable on director remuneration but we haven't paid any gst till now. What are the consequences?. Please explain.

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Spurto Consultancy Services (Consultant) (1891 Points)
Replied 12 June 2020

The CBIC has clarified vide circular dated 10.06.2020 that GST will not be applicable on director's remuneration if the consideration paid is recorded as salary in the book of accounts of the Company and TDS have been deducted u/s 192.

So please check the applicability

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kartheek kumar reddy (student) (82 Points)
Replied 12 June 2020

For example sitting fee paid to independent directors for FY 17-18 Rs. 85000/- & FY 18-19 Rs. 250000/-. I did not paid gst under RCM til now. What are the consequences? Is there any interest or penalty? If yes what is the interest rate? If should I pay now can i take the same as input credit?

Hemal Makwana (Designation) (771 Points)
Replied 12 June 2020

No penalty.. only interest will be levied at 18% and ITC can be availed.

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kartheek kumar reddy (student) (82 Points)
Replied 12 June 2020

A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the due date of furnishing of the return under section 39 for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier

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Hemal Makwana (Designation) (771 Points)
Replied 12 June 2020

Agreed. it's litigative but can surely be challenged as I have personally dealt with these scenario.Authorities at lower level may won't allow.

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kartheek kumar reddy (student) (82 Points)
Replied 12 June 2020

So i cant take the ITC on such payment for the FY 17-18 & 18-19 but I can take it for FY 19-20.

Hemal Makwana (Designation) (771 Points)
Replied 12 June 2020

With respect to FY 2019-20, there exists no doubt, you can avail till September 2020. For previous FY, you can avail subject to possibility of litigation.