GST on Director's Remuneration - CBIC Clarification

Dear Readers,

Recently Rajasthan AAR has passed an advance ruling where authority has promulgated that the salary drawn by directors from the company is liable to GST under reverse charge mechanism even though TDS on such amount has been deducted by company u/s 192 as per TDS provisions. This AAR has raised a question for debate on GST applicability on employment contracts of the directors. 

Today CBIC has answered the question raised in AAR vide Circular No. 140/10/2020-GST dated 10.06.2020 where board has clarified that GST is applicable in case director's salary is declared separately other than salaries and subjected to TDS under section 194J and director's salary is not taxable in case it is part of salaries and subjected to TDS u/s 192. Circular can be downloaded from the link given below:

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