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Rcm applicability on other than salary to a director

somesetti nagajyothi (Student CA IPC / IPCC) (29 Points)

11 June 2020

if a company pays any amount other than a salary then rcm is applicable or not?
if applicable at which rate?
applicable from when?

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9 Replies

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 11 June 2020

To an employee?

No, it is not applicable.

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somesetti nagajyothi (Student CA IPC / IPCC) (29 Points)
Replied 11 June 2020

To director

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 11 June 2020

For what purpose if the amount paid to director? Bonus?

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 11 June 2020

Bonus and salary are not charged under RCM if they are whole time directors.

Non executive, non whole time directors and outside directors are not employees of the company. So they will fall under RCM for salary, other charges received by them.

Pankaj Rawat (GST Practitioner) (55047 Points)
Replied 11 June 2020

As per the Circular 140/10/2020 GST , dated 10/6/2020 Yes RCM is applicable @ 18% .

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Pankaj Rawat (GST Practitioner) (55047 Points)
Replied 11 June 2020

Bonus is the part of Salary So any bonus or salary is paid ,to whole time director No RCM is applicable.(As per Schedule III)

Mayuri Thakker (11 Points)
Replied 12 June 2020

Salary attracts tds under section 192B and if the whole time director works under contract of providing professional services tds under 194J will be applicable since the salary here is given under employment so no gst is to be paid under rcm

whereas in case of independent directors it is applicable

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

Any amount (which is not part of CTC)paid to director of a company, in that case, company shall be liable to pay GST under RCM. Recently circular issued by CBIC clarifies this position.