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Reverse charge mechanisms

ramesh (Student CA Final ) (82 Points)

04 July 2019

whether director remuneration is liable for reverse charge ?

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8 Replies

Amit Mohan Pandey (Practising chartered accountant) (371 Points)
Replied 04 July 2019

director remuneration comes under non GST as part of schdule 3 of entry 2 ( employee employer relationship) so no RCM no gst

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RAJA P M ("Do the Right Thing...!!!") (127921 Points)
Replied 04 July 2019

RCM not applicable on Remuneration to partners...

Kishor Lulla (965 Points)
Replied 04 July 2019

liable for rcm. i differ.

tarun garg (8 Points)
Replied 05 July 2019

yes, services provided by a director to a company is liable to be taxed under RCM...as per notification no. 13/2017 date 28/6/2017

Pankaj Rawat (GST Practitioner) (55047 Points)
Replied 05 July 2019

No RCM applicable on Remuneration paid to Whole time director.

Whole time director is considered as an employee of the company and commission received by him is in the course of his employment. In your case commission is received by the whole time director so it would not fall under the ambit of GST as it is not a supply so question of levy does not arise neither in reverse charge nor in normal charge. PS: Reverse charge would come into picture in case of sitting fees or commission is received by a director other than whole time director.

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RAJA P M ("Do the Right Thing...!!!") (127921 Points)
Replied 05 July 2019

Very Nice Explanation Mr Pankaj Rawat Ji...

@ Kosher Lulla & Tarun garg.,
Remuneration is one of Salary nature. RCM not applicable for remuneration...

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