Is RCM applicable on wages?

If company is deducting TDS u/s 192 of Income Tax Act, 1962 for making salary payment to directors and issuing Form-16 to its director, then again no GST is required to be paid under RCM.

How do you treat directors remuneration?

Whether it is Managing director or whole time directors. A company having only one managing director, whole-time director or manager shall not pay more than 5\% of its net profits. A company has more than one such directors, remuneration shall be payable not more than 11\% of the net profit.

What is included in directors remuneration?

Directors’ remuneration refers to how directors of a company are compensated by a company for their services usually fees, salary, use of company property or other benefits. The packages are first approved by shareholders and the board of directors.

How is director remuneration taxed?

As per Section 16 read with Section 192 of Income Tax Act, 1961, all directors remuneration are treated as Salary and will be taxable under the head “Salary” and Company is required to deduct TDS except the sitting fees.

How do I pay GST under RCM?

This means that the GST will have to be paid directly by the receiver instead of the supplier. The registered buyer who has to pay GST under reverse charge has to do self-invoicing for the purchases made. In intra-state purchases, CGST and SGST have to be paid under reverse charge mechanism (RCM) by the purchaser.

Is RCM applicable on Labour contract under GST?

Labour contractor registered under GST: If the supplier agency is registered under GST, the agency should charge GST for labour supply. The Labour contractor is not registered under GST: If the supplying agency is not registered under GST, the service receiver should charge GST under the reverse charge mechanism.

Which of the following include disqualification of director?

Under company law, a director can be disqualified for any of the following reasons: He is of an unsound mind and is declared so by the court. He is insolvent. He is in the process of declaring insolvency and his application is pending.

Is GST registration mandatory for directors?

The directors of the company are exempted from taking GST registration provided they providing only such services on which Tax is to be paid on RCM basis by the recipient of such services. The company being required to pay tax on RCM basis, is required to get registered compulsorily irrespective of its turnover size.

How is director remuneration determined?

Who determines directors’ fees? Shareholders of public companies generally approve an upper limit or pool of fees for the board as a whole. The board then determines how this is distributed to individual directors.

What should be included in directors emoluments disclosure?

Directors’ emoluments include all amounts receivable in respect of the year in question, whether or not they were actually received in that year. Where a sum is not receivable in respect of any particular period then it should be accounted for when received by the director.

Is GST payable on directors remuneration?

The services provided by a non-executive director to the company is subject to GST and will fall under the reverse charge mechanism of GST. GST rate at 18\% applies to the total amount of directors’ remuneration.

Is director fee subject to GST?

1. Directors’ fees paid to directors personally, and retained by them. Not subject to GST—excluded from the meaning of taxable activity by section 6(3)(b).