Central Govt Cleared Confusion Over GST on Company Directors’ Fees

The Central Government recently cleared the confusion over GST on Company Directors. The authorities also reflected their concerns regarding held-up input tax credit refunds A complete guide for understanding the basics of input tax credit and it calculation with detailed examples under GST (Goods and Services Tax) India. Read More, it is an issue that is causing problems for the industry due to the liquidity and cash flow crisis.

The finance ministry in their recent announcement clarified that persons who are employees as well as also a member of the board of companies, will not attract GST if they were getting “salaries” and which is also denoted in the company’s account books, on which tax was already deducted and also get deposited with the income tax authorities.

The authorities stated that “The part of employee director’s remuneration, which is declared separately other than “salaries” in the company’s accounts and subjected to TDS as fees shall be treated as consideration for providing services, and is, therefore, taxable,”.

The GST wing considered Income Tax Act to clarify that remuneration paid to the independent directors can be considered as the nature of the professional fee, which usually gets taxed according to the provisions of Income Tax Act Get to know complete guide of TDS provisions under income tax act 1961 at here. Also, we include several topics as TDS returns, TDS due dates, penalty and more..

“Additionally, there are several complaints of harassment, the authorities made the refund of the collected input tax credit on imports easier, and also they are taking care of input service distributor invoices for tax on goods and services utilized of across branches and reverse charge (pay GST)), considering an earlier announcement”.