Page 96 - GSTL_30th April 2020_Vol 35_Part 5

582 GST LAW TIMES [ Vol. 35
Notification No. 13/2017-Central Tax (Rate), dated 28-6-2017 states that “on
categories of supply of services mentioned in column (2) of the Table below,
supplied by a person as specified in column (3) of the said Table, the whole
of central tax leviable under section 9 of the said Central Goods and Ser-
vices Tax Act, shall be paid on reverse charge basis by the recipient of the
such services”. The notification is issued under Section 9(3) of the CGST
Act, 2017. Entry 6 of the said Notification reads as under -

Sl. Category of Supply of Supplier of Recipient of Services
No. Services Services
1 2 3 4
6 Services supplied by a A director of a The company or a body
Director of a company or company or a corporate located in the
a body corporate to the body corporate taxable territory
said company or the
body corporate

In the present case, the applicant is the company and is located in the taxa-
ble territory and the Directors’ remuneration is paid for the services sup-
plied by the Director to the applicant company and hence the same is liable
to tax under reverse charge basis under section 9(3) of the Central Goods
and Services Tax Act, 2017;
1 1.7 that therefore, going by the above decision one interpretation
emerges that the work done by our directors as an employee would also be cov-
ered and their services would be leviable to GST under clause (93) of Section 2 of
CGST Act, 2017. However, the Hon. Authority of Advance Ruling has not differ-
entiated nor it has dealt with the possibility of a person being director of the
company and simultaneously working as a director/employee also;
1.8 that we at M/s. Clay Craft (P) Ltd., are already paying GST under
reverse charge mechanism [xxx] on any commission paid to our Director as such
amount pertain to the service provided by them in the capacity of a Director;
1.9 That we further submit that the salary being paid to our Directors is
being booked under “Income from Salary” by the Directors in their personal In-
come Tax returns;
1.10 That in such circumstances a doubt has arisen about applicability
of Reverse Charge Mechanism on the salary paid to the Directors of our compa-
ny who are also working as Directors as employee and having been treated as an
employee at par with other employees;
1.11 That it is submitted that services provided by an employee to his
employer are under clause 1 of the Schedule III which relates to the activities
which are not treated either as supply of Services or Goods. Applicant submits
that recently it has also been reported in press that salaries given to CEO and
employees is not liable for GST. We would like to refer an article published in
The Economic Times which states as under :
MUMBAI : The government is looking to clarify that goods and services tax
(GST) should not be applicable on salaries of chief executives sitting in head
offices, two people in the know said.

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1 Paragraph number as per official text.
GST LAW TIMES  30th April 2020  96