The CBIC had said that salaries paid to the directors who are employees of the company shall not attract GST. This clarification comes after a ruling given by Rajasthan Authority for Advance Ruling. The CBIC had referred Schedule III of GST Act and stated that the part of director’s remuneration that are declared as ‘salaries’ in the books of a company and subjected to TDS under Section 192 of the IT Act, are not taxable being consideration for services by an employee to the employer in the course of or in relation to his employment. It has also clarified that those directors whose salary is in the nature of professional fee and not salary, GST shall be payable on reverse charge. The recipient of the said services, i.e. the company, is liable to discharge the applicable GST on it on a reverse charge basis,” the CBIC said.
