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Rajasthan rules sums paid to company directors liable to GST

  • IN
  • April 16th 2020
  • By Pratik Jain

In a recent ruling, the Authority for Advance Ruling (AAR) in the State of Rajasthan held that consideration paid to the directors of a company by way of salary and commission, was liable to GST under the reverse charge mechanism. This ruling is important since many taxpayers have taken a position that such services should be treated as services rendered by an employee to the employer and not subject to GST, per Schedule III of the CGST Act, although the AAR does not provide any specific reason for the transaction to be excluded from Schedule III, i.e. as services provided in the course of employment.

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