Services provided by Director in personal capacity not taxable under RCM in the hands of Company: GST Council

In recent GST Council Meeting held on 11th July 2023, GST Council clarified that services supplied by a director of a company to the company in his private or personal capacity such as supplying services by way of renting of immovable property to the company or body corporate are not taxable under RCM.

Only those services supplied by a director of company or body corporate, which are supplied by him as or in the capacity of director of that company or body corporate shall be taxable under RCM in the hands of the company or body corporate under notification No. 13/2017-CTR (Sl. No. 6) dated 28.06.2017.

Summary - 

1) Service by Director in personal Capacity -

Not taxable under RCM in the hands of company. (May be taxable under forward charge as per normal limits under GST.)

2) Service by Director in director capacity (as employee) -

Completely out of scope of GST. (TDS will be deducted under salary u/s 192 of Income Tax Act.)

3) Service by Director in director capacity  (as other) -

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GST Council Meeting

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Reverse Charge Mechanism

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