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Salaries paid to company directors not to attract GST

Salaries paid to company directors not to attract GST

The Central Board of Indirect Taxes and Customs (CBIC) on Wednesday said GST will not be levied on salaries paid to directors who are employees of the company.

The CBIC issued a clarification following a ruling by the Rajasthan Authority of Advance Ruling (AAR) in April that said companies will have to pay GST on the remuneration they dole out to directors.

"The part of director's remuneration that are declared as 'salaries' in the books of a company and subjected to TDS under Section 192 of the IT Act, are not taxable being consideration for services by an employee to the employer in the course of or in relation to his employment in terms of Schedule III of the CGST Act, 2017," the CBIC said.

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