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partners remuneration

Keval Mahendra Muni (28 Points)

11 June 2017

whether GST will be applicable on partners remuneration also. and ITC will be available on same?

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10 Replies

CA Rashmi Gandhi (Chartered Accountant) (86308 Points)
Replied 11 June 2017

No GST appliacble on partner remuneration as same is in purview of Direct taxes.

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Preeti (Team_GSTSoln) (Team GST Experts) (1926 Points)
Replied 11 June 2017

partners remuneration is employer employe relation, covered under negative list

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nirmalbhai thakker (117 Points)
Replied 11 June 2017

Preeti as per my view, u can not prove it as employer employee relation. Remuneration to partners is at present most burning issue,.
reason is as under
1 see definition of SERVICES SEC 2(102})
2 AS per this section , all other than goods - money and security is Services.
3 As per various judgement , payment of interest dividend loan borrowing and profit distribution among partners are supply of MONEY. SO interest and profit distribution will be out of the net of GST

BUT HOWEVER Remuneration given to partners are subject to GST

CA Rashmi Gandhi (Chartered Accountant) (86308 Points)
Replied 11 June 2017

Correcting myself

Partners are not employee of the partnership firm, so they supply services to their firm and in consideration get remuneration which is liable to #GSTsubject to threshold turnover of Rs. 20 Lakh (Special Category States Rs. 10 Lakh)

CA Rashmi Gandhi (Chartered Accountant) (86308 Points)
Replied 11 June 2017

Sorry its directors

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nirmalbhai thakker (117 Points)
Replied 11 June 2017

RCM IS apply if Partners are u registered

nirmalbhai thakker (117 Points)
Replied 11 June 2017

unregistered*

nirmalbhai thakker (117 Points)
Replied 11 June 2017

one more issue every partnership firm is going to face is VALUATION OF TAXABLE SUPPLY IN CASE OF REMUNERATION.
AS THE SAME IS FALL under related party definition clause E regarding one of them directly or indirectly control others. it will creates many litigations in future.
Even if any one is not giving any remuneration to working partners in books, department will value the said services as per valuation rule no 5 and demand accordingly.

nirmalbhai thakker (117 Points)
Replied 11 June 2017

PL SEE ARTICLE POSTED BY AKSHAY KUMAR JAIN BEFORE 4 DAYS.

AN INITITATIVE TO CLEAR GST DOUBTS BY GOVT THROUGH TWETTER

SEE 03-06 TWETTER

GOVT AUTHORITY CLEAR CUT MENTIONED THAT REMUNERATION TO PARTNERA IS under GST

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