CBIC issues circular for clarity on demand from industry and trade associations
GST also will be deducted on payments aside from salary to directors and whole-time directors
The Goods and Services Tax (GST) will now be levied on the professional fees and remuneration paid to the administrators of the businesses. The Central Board of Indirect Taxes and Customs (CBIC) has stated during a circular that GST is going to be levied on payments made to the company’s independent directors (independent directors) and non-executive directors (they aren’t employees of the company). GST is going to be deducted by the corporate on reverse charge basis on the payment made by the corporate in lieu of the service of the administrators.
The salary won’t come under GST
GST also will be levied on all kinds of payments made to directors and whole-time directors aside from salary. Directors and whole-time directors also are employees of the corporate. this suggests that additionally to salary to directors, whole-time directors, and MDs, if any payment is formed which isn’t a neighborhood of the salary and is charged TDS associated with professional or technical services, it’ll attract GST. However, GST won’t be levied on the salary paid to such directors.
An explanation will benefit the industry
Cyril Amarchand Mangaldas partner Mekhala Anand said that this clarification of the govt would provide a big relief to the businesses. Companies trying to get over it after the coronavirus crisis will enjoy it. Various trade and industry associations had demanded clarity on the difficulty of CBIC.