siriyanna
(Student CA IPC / IPCC)
(35 Points)
Replied 17 August 2018
Dear Sir,
Sec 2 (102) of CGST Act,2017 “services” means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged;
Salary under GST :
As per clause I of schedule III, CGST Act, 2017 ‘services by an employee to employer in the course of or in relation to his employment’ are out of the purview of GST. It is important to note that services in the course or in relation to employment are out of the purview of GST. The provision does not include services to the extent of consideration by way of salary. It implies that any other considerations paid to employee usually in the course of business may fall under this clause.
Partners Remuneration:
Partners are not employee of the partnership firm, so they supply services to their firm and in consideration get remuneration which is liable to #GST subject to threshold turnover of Rs. 20 Lakh (Special Category States Rs. 10 Lakh).
Formally remunerations are for work... And that is why are allowed as deductions in Income Tax. Further the partner would be liable to get registration if aggregate remuneration, from all firms in which he is a partner, is > 20 Lakhs.
Remuneration to partners over & above share of profits not in nature of employer-employee relationship. Hence appears to be liable to tax.
Conclusion:
As per my view, Partners Remuneration is not in the course or in relation to employment. We need to take registration under GST, if remunaration exceeds 20 Lakhs.
CAclubindia
