🧾💼 GST on Director’s Services to Company

✅ 1️⃣ Applicability of GST

Yes, GST is applicable when a director provides services to a company — but the manner of tax (RCM or FCM) depends on the nature of the director’s role.

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🔍 2️⃣ Two Types of Directors

👤 Type	📋 Status	⚖️ GST Applicability
Independent Director / Non-Employee	Not on payroll	✅ GST under RCM
Executive Director (Full-time)	On payroll	❌ No GST (treated as employee)

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🔁 3️⃣ Reverse Charge vs Forward Charge

🧑‍💼 Director Type	🧾 GST by	💸 Tax Mechanism
Independent Director	Company	✅ Reverse Charge
Non-Executive Director	Company	✅ Reverse Charge
Employee Director (on salary)	N/A	❌ No GST

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📜 4️⃣ Legal Basis

🏛️ Notification No. 13/2017 – Central Tax (Rate)

• Entry No. 6: Services provided by a director to a company → GST under RCM

👨‍⚖️ CBIC Circular No. 140/10/2020-GST

• Distinction between employment services (exempt) and contractual/consultancy services (taxable)

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📊 5️⃣ GST Rate

• 💰 18% GST (SAC Code: 999199 – Other professional, technical and business services)

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🧾 6️⃣ Example – Reverse Charge

A director receives sitting fees of ₹50,000.

• GST @18% = ₹9,000

• Company pays ₹9,000 to govt under RCM

• Director receives only ₹50,000

• Company can claim ITC, if eligible

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⚠️ 7️⃣ Common Mistakes to Avoid

❌ Treating all director services as exempt
❌ Not issuing self-invoice under Rule 46
❌ Missing RCM disclosure in GSTR-3B (Table 3.1(d))
❌ Not checking if the director is also registered and billing separately

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🧠 8️⃣ Quick Decision Flow

Q: Is the director on payroll (getting Form 16)?
👉 Yes → ❌ No GST (employee relationship)
👉 No → ✅ GST under RCM (company pays)