Page 95 - GSTL_30th April 2020_Vol 35_Part 5

2020 ] IN RE : CLAY CRAFT INDIA PVT. LTD. 581
Tariff. He is registered with Goods & Services Tax Department and are having
GST registration No. 08AAACC6866D1ZO. He is availing Input credit on inputs
as well as input services used in or in relation to manufacture of our final prod-
uct as per the provisions of GST Act, 2017;
1.2 that the applicant is a private limited company incorporated under
the Companies Act, 1956 having Certificate of Incorporation No. 17-04677 of
1988-1989;
1.3 Further that presently our Board of Director consists of six (6) direc-
tors namely :
(i) Shri Padam Narayan Agarwal,
(ii) Rajesh Narayan Agarwal,
(iii) Vikas Agarwal,
(iv) Bharat Agarwal,
(v) Deepak Agarwal &
(vi) Pradip Agarwal
1.4 that all the above-mentioned Directors are performing all the duties
and responsibilities and duties as required under the laws. However along with
that these all directors are also working in the company at different level of man-
agement in the company and each one of them is holding charge of procurement
of raw material, production, quality checks, dispatch, accounting etc. In other
words, they are also working as an employee of the company for which they are
being compensated by the company by way of regular salary and other allow-
ances as per the company policy and as per their employment contract. In fact
these Directors are treated at par with any other employee of the company as far
as their employment is concerned. The company is deducting TDS on their salary
and PF laws are also applicable to their service. Therefore, in all practical pur-
poses these directors are the employees of the company and are working as such
besides being Director of the company;
1.5 that recently certain facts events have taken place which have made
the applicant to reconsider the situation afresh;
The first one which has come to the knowledge of the applicant is the de-
cision by the Hon’ble Authority of Advance Ruling, Karnataka (Bangaluru) given
in the case of M/s. Alcon Consulting Engineers (India) Pvt. Ltd. Bangluru (AR No.
KAR ADRG 83/2019), dated 25-9-2019 [2019 (30) G.S.T.L. 678 (A.A.R. - GST)]
(sic). In this ruling the Hon’ble Authority of Advance Ruling has in para 5 ruled
as under :
Regarding the remuneration to the Directors paid by the applicant, the ser-
vices provided by the Directors to the Company are not covered under
clause (1) of the Schedule III to the Central Goods and Services Tax Act,
2017 as the Director is not the employee of the Company. The consideration
paid to the Director is in relation to the services provided by the Director to
the Company and the recipient of such service is the Company as per
clause (93) of section 2 of the CGST Act and the supplier of such service is
the Director.
The question before us is not whether this service is taxable or not, but
whether this supply of services is liable to tax under reverse charge mecha-
nism.

GST LAW TIMES  30th April 2020  95