QUESTION
A Practicing Chartered Accountant registered under GST. He is a non-executive director (i.e neither whole time director nor managing director) in a Pvt. Ltd Co. and does not get ant remuneration from that co. He also provides professional services to that company and charge professional fee as per the work regularly on monthly retainership basis. In that case, whether he should charge GST on forward charge basis or that company has to pay GST on his services under RCM basis ?
ANSWER
Facts of the case: A
Practicing Chartered Accountant registered under GST is a non-executive director
(i.e neither whole time director nor managing director) in a Pvt. Ltd Co. and
does not get any remuneration from that co. He also provides professional
services to that company and charges professional fees as per the work regularly
on monthly retainership basis. Whether he should charge GST on forward charge
basis or that company has to pay GST on his services under RCM basis ?
Law Applicable:
Notification No. 13/2017 Central Tax (Rate)
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6 |
Services supplied by a director of a company or a body corporate to the said company or the body corporate. |
A director of a company or a body corporate |
The company or a body corporate located in the taxable territory. |
Reply: The services on which Reverse charge is applicable is given in Notification No. 13/2017 Central Tax (Rate). Since he is non executive Director. Therefore RCM will be applicable on the services provided by him.
However if CA is charging tax on the services provided by him on forward charge
basis therefore there is no need to pay tax again under RCM.
The same decision is given by Mumbai Tribunal in case of UMASONS AUTO COMPO PVT. LTD. Versus Commr. Ofc. Ex. &cus., Aurangabad. [2013(11)LCX0149] (Reply dt. 23/03/2021)