Page 98 - GSTL_30th April 2020_Vol 35_Part 5

584 GST LAW TIMES [ Vol. 35
they are engaged as public authorities, as may be notified by
the Government on the recommendations of the Council,
shall be treated neither as a supply of goods nor a supply of services.
(3) Subject to the provisions of sub-sections (1) and (2), the Government
may, on the recommendations of the Council, specify, by notification, the
transactions that are to be treated as -
(a) a supply of goods and not as a supply of services; or
(b) a supply of services and not as a supply of goods.
1.19 that further Entry No. 1 of Schedule III to the CGST Act, 2017
states as under :
1. Services by an employee to the employer in the course of or in relation
to his employment.
1.20 that from the above provisions of CGST Act, 2017 it is clear that an
employee who is rendering his services to his employer in or in relation to his
employee would not constitute service or supply and thus the payment received
by him for this purpose would not be taxable under the CGST Act, 2017 provi-
sion;
1.21 The applicant submits that the term “employee” has not been de-
fined under either CGST Act, 2017 or SGST Act, 2017. Therefore, to understand
as to who is an employee we would have seek understanding from other sources;
As per Cambridge Dictionary an employee is :
“someone who is paid to work for someone else”
In the case of applicant, the director is an individual (someone) who is working
for the company (someone else) thus from this point of view our directors are
nothing but an employee as long as they are working as an individual in the
company;
1.22 that further we would like to submit the definition of employee
under various Indian laws which would guide us to make our submissions clear
for kind consideration of Hon’ble Authority of Advance Ruling;
1.23 that Section 2(94) of the Companies Act reads as under :
Section 2(94) : “director” includes a director in the employment of the com-
pany;
1.24 Applicant submits that “Director” has been defined to include a
director in the employment of the company. The definition of ‘director’ is an in-
clusive definition. A director refers to a director who has been in employment of
the company on a fulltime basis and is also entitled to receive remuneration.
1.25 that further the explanation appended to Section 269 of the Com-
panies Act, 1956 states as under :
Explanation. - In this section “appointment” includes reappointment and
“director” includes a director in the employment of the company.
1.26 that Section 269 of the Companies Act, 1956 contained the defini-
tion of the term “director” appended as an explanation to Section 269 which cor-
responds to the definition under this Act;
1.27 that a director is a director rendering his services on whole time
basis to the company. Further, a employee, when appointed as a director of the
company, will be occupying the position as the director. This position is clarified
by DCA vide Letter No. 2/19/63-PR, dated 29-6-1964 (sic) which provided that a
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