GST on Directors Remuneration:

GST on Directors Remuneration:


GST on Directors Remuneration:


In the GST Act, Government had notified  that Services provided by Director of a company to the

company is covered under reverse charge services notified on 28th of June, 2017

The extract notification is as follows:

SI. No. Category of Supply of Services Supplier of Service Recipient of Service
1 Services supplied by a director of a company or a body corporate to said company or the body corporate A director of a company or a body corporate The company or a body corporate located in the Taxable territory


As per sec 7(2) of IGST Act Supply EXCLUDES services supplied by an employee to the employer in the

course of or in relation to his employment.

What is the meaning of Services under GST?

As per section 2(102) of CGST Act, 2017, “services” means anything other than goods, money and

securities but includes activities relating to the use of money or its conversion by cash or by any other

mode, from one form, currency or denomination, to another form, currency or denomination for which

a separate consideration is charged.

Accordingly it may be construed that services of director, like:

 sitting fees,

 commission,

 services charges for giving guarantee for loan taken by company

has been covered under the Government notified services on which the tax would be payable on reverse


If services are provided under employee to employer relationship then it will be out of the ambit of GST,

but other than salary whatever is provided to directors are covered under RCM.

However independent director or part time director are not employee of the company so

any amount paid to them will attract the levy of GST under RCM.

Who is required to take the registration?

The company being required to pay tax on RCM basis, is required to get registered compulsorily

irrespective of its turnover size.