Services Supplied by Director of Company to Body Corporate/Company in his Personal Capacity not taxable under RCM: CBIC clarifies [Read Circular]
Services – Services Supplied by Director of Company – Director of Company – Body Corporate – Company in his Personal Capacity – taxscan
Services – Services Supplied by Director of Company – Director of Company – Body Corporate – Company in his Personal Capacity – taxscan
The Ministry of Finance has issued the clarification regarding the taxability of services supplied by the Director of a Company to the Body Corporate/Company in his personal capacity such as renting of immovable property..etc under Reverse Charge Mechanism. The issue was considered by the 50th GST Council meeting held on 11th july 2023.
The Circular no. 201/13/2023-GST was issued on 1st August 2023, addressed to The Principal Chief Commissioners/ Chief Commissioners/ Principal Commissioners/ Commissioner of Central Tax (All) / The Principal Director Generals/ Director Generals (All).
According to the circular, Reference has been received requesting for clarification whether services supplied by a director of a company or body corporate in personal or private capacity, such as renting of immovable property to the company, are taxable under Reverse Charge Mechanism (RCM) or not.
Entry No. 6 of notification No. 13/2017 CTR dated 28.06.2017 provides that tax on services supplied by the director of a company or a body corporate to the said company or the body corporate shall be paid by the company or the body corporate under Reverse Charge Mechanism.
However, it is clarified that services supplied by a director of a company or body corporate to the company or body corporate in his private or personal capacity such as services supplied by way of renting of immovable property to the company or body corporate are not taxable under RCM.
Only those services supplied by the director of a company or body corporate, which are supplied by him as or in the capacity of director of that company or body corporate shall be taxable under RCM in the hands of the company or body corporate under notification No. 13/2017-CTR (Sl. No. 6) dated 28.06.2017.
To Read the full text of the Circular CLICK HERE
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