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RCM on Specified Services received by Company

CRR RR (29 Points)

14 January 2025

Hi Sir

A Company is receiving below mentioned services from an unregistered supplier

Please advise whether RCM is applicable and the applicable rates

Independent director services
Security services
GTA Services
Rent service
Legal services

Thanks

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3 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (182247 Points)
Replied 14 January 2025

Independent Director Services

RCM Applicability: Yes

Applicable Rate: 18%

Security Services

RCM Applicability: Yes

Applicable Rate: 18%

GTA Services

RCM Applicability: Yes, if the recipient is a registered person.

Applicable Rate: 5% (with no ITC), if the GTA provides services to a registered person.

Renting of Motor Vehicle Services

RCM Applicability: Yes

Applicable Rate:

18% if the supplier is not a body corporate and the vehicle is not a luxury vehicle.

5% (with no ITC) for transport of goods by a GTA.

Legal Services

RCM Applicability: Yes, if the recipient is a business entity.

Applicable Rate: 18%

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Manoj Punjabi (Accountant) (286 Points)
Replied 14 January 2025

Thank you Dhirajlal Rambhia ji,

Reply is very clear, I too had similar query, one point I am confused about, please guide:

Director Salary, does it fall under Independent director service, does it attracr RCM?

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (182247 Points)
Replied 14 January 2025

The remuneration paid to Directors is issued only on receiving approval from shareholders and the Board of Directors. A director can be executive, non-executive, Managing Director, Independent Director, Small Shareholder Director, Women Director, Additional Director, or Alternate Director depending upon their responsibility towards the company.

CBIC has clarified the applicability of GST on director’s remuneration vide CGST circular no. 140/2020 dated 10th June 2020. In the circular, the criteria to classify a director as employee or not is clearly outlined. If the services are not classifiable as employer-employee relationship, then GST is levied on such remuneration. In that case, company (service recipient) will be liable to deposit the GST dues on reverse charge basis with the government as per Notification No. 13/2017.