Page 154 - GSTL_ 28th May 2020_Vol 36_Part 4

600 GST LAW TIMES [ Vol. 36
ting salary then the said salary is neither supply of goods nor supply of service in
terms of clause 1 of Schedule III of CGST Act, 2017. Further, in case if the appli-
cant is in receipt of the amount towards his share of profit from the said partner-
ship firm, then also the said income is not under the purview of GST as the share
of profit is nothing but application of money and hence the said salary is not re-
quired to be included in the aggregate turnover for registration under the provi-
sions of GST Act.
7.8 Salary received as Director from a Private Limited Company :
The applicant is in receipt of certain amount termed as salary as Director
of a private limited company. Two possibilities may arise with regard to the in-
stant issue of amount received by the applicant. The first possibility that the ap-
plicant is the employee of the said company (Executive Director), in which case
the services of the applicant as an employee to the employer are neither treated
as supply of goods nor as supply of services, in terms of Schedule III of CGST
Act, 2017.
The second possibility that the applicant is the nominated director (non-
Executive Director) of the company and provides the services to the said compa-
ny. In this case the remuneration paid by the company is exigible to GST in the
hands of the company under reverse charge mechanism under Section 9(3) of the
CGST Act, 2017, in the hands of the company, under Entry No. 6 of Notification
No. 13/2017-Central Tax (Rate), dated 28-6-2017.
In the instant case the applicant has not furnished any documentary evi-
dence such as copy of agreement between the applicant and the said private
company, copy of appointment order, details of ESI, PF deductions etc., so as to
decide whether the applicant is in receipt of salary as an employee or as an inde-
pendent director. Thus in the absence of any documentary evidence, it is not pos-
sible to decide whether the amount received by the applicant is towards his ser-
vices as an Executive Director or a Non-Executive Director.
In view of the above, the remuneration received by the applicant as Ex-
ecutive Director is not includable in the aggregate turnover, as it is the value of
the services supplied by the applicant being an employee. Further if the appli-
cant receives the remuneration as a Non-Executive Director, such remuneration
is liable to tax under reverse charge mechanism under Section 9(3) of the CGST
Act, 2017, in the hands of the company, under Entry No. 6 of Notification No.
13/2017-Central Tax (Rate), dated 28-6-2017. Thus the value of the said services of
the applicant being a Non-Executive Director are includable in the aggregate
turnover, as it is the value of the taxable services supplied by the applicant,
though the tax is discharged by the private limited company, under reverse
charge mechanism.
7.9 Rental income on Commercial Property :
The transaction of rental/lease of commercial property amounts to sup-
ply; applicant receives periodical income towards the impugned supply of ser-
vice & the same is in the course or furtherance of business and hence the said
transaction amounts to supply in terms of Section 7(1)(a) of the CGST Act, 2017.
Thus it is a taxable supply of service having SAC 997212 and therefore the value
of such supply is to be included in the aggregate turnover, for registration.
7.10 Rental income on Residential Property :
The transaction of rental/lease of residential property amounts to sup-

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