In a welcome move, the Ministry of Finance, Policy Wing has come out with a clarification putting to rest all the confusion on applicability of GST on Directors remuneration. The Remuneration to Directors has been divided into two categories, payments to Independent Directors and Directors working as employees. Broadly, the payment of remuneration to the Independent Directors will attract GST on reverse charge basis, whereas the salary payments to employee Directors will not attract GST, if the payment is treated as salary in the books of accounts and TDS compliance is made in accordance with the provisions of section 192 of the Income Tax Act, 1961. Any other payment to whole time Directors besides salary will attract GST though.
GST on Director's salary - Tax Management Consultancy by Aryan Consulting - The GST levy on executive directors is an opportunity that the GST Council & CBIC shouldn’t miss to clarify, writes Mukesh Butani https://www.bloombergquint.com/gst/gst-on-directors-remuneration-a-quandary