We will discuss the applicability of RCM on service provided by Director (Director’s Remuneration). We will cover Independent Director as well as Full Time Director.

Relevant Section: Section 9 of CGST Act 2017

Relevant Notification: Notification No. 13/2017 – Central Tax (Rate) dated 28/06/2017 (RCM Notification)

Relevant Circular: Circular No – 140/10/2020 – GST dated 10/06/2020 (Clarification by Government)

Notification No. 13/2017 – Central Tax (Rate) dated 28/06/2017 (RCM Notification) issued under Section 9(3) of the CGST Act 2017 provides for payment of GST under RCM on service provided by Director of a Company to the said Company.

Sl. No.	Category of Supply of Service	Supplier of Service	Recipient of Service
6	Services supplied by a director of a company or a body corporate to the 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.

Independent Director (Not an employee of the Company)

Nature of Services:

• Sitting fees
• Travelling and incidental expenses
• Commission
• Other remuneration for the purposes of attending board meetings

such services supplied by independent director are in the nature of professional services, such supply will attract GST under RCM.

Full Time Director (also an employee of the Company)

Income Tax Act, 1961 gives two different treatments to the remuneration received by the directors.

Salary to the Director: TDS under Section 192 – Not taxable under GST (hence no question of RCM under GST)

Other than salary: TDS under Section 194J (Fees for professional or Technical Services) – Taxable under RCM