GST applicability on Director Remuneration
Director’s remuneration which is declared separately ‘ other than salaries’ in the Company’s accounts and subjected to TDS under Section 194J of the IT Act as ‘Fees for professional or Technical Services’ shall be treated as consideration for providing services which are outside the scope of Schedule III of the CGST Act, and is therefore, taxable and covered under reverse charge mechanism in terms of Notification No. 13/2017-Central Tax (Rate), dated 28-6-2017 (as amended), the recipient of the said services i.e. the Company, is liable to discharge the applicable GST on it. Now, in case of directors remuneration accounted for as salaries in the books of accounts and TDS deducted under Section 192, GST is not applicable therefore no liability under RCM. In short if you are deducting TDS under 194J, than company will be liable to pay GST under RCM @18% and in case of TDS deduction under 192, transaction will be outside the scope CGST Act. GST paid under RCM can be claimed as Inp