Director Salary Exempt from GST – Karnataka AAR
The Question and Ruling as follows :
Applicant’s interpretation of law :
The applicant furnishes his understanding/ interpretation of law issue /point wise which is as under:
a) The income received towards partner’s salary, as a partner, from the partnership firm and also the income received towards salary as Director from a Private Limited Company are not ineluctable in the Aggregate Turnover for the reason that any type of salary is not in the purview of GST as the same needs to be treated neither as supply of goods nor as supply of services.
b) The income received towards rent on commercial property is ineluctable in the Aggregate Turnover as renting of immovable commercial property is a taxable service and whenever rent falls due, on the basis of rental agreement, either monthly or quarterly, the supply of service is deemed to have been done.
c) The income received towards residential rent is ineluctable in the Aggregate Turnover, for registra tion , though the renting of residential property is an exempted service.
d) The income received towards all remaining 15 types / categories is not ineluctable in the Aggregate Turnover, as the said all 15 cases are not under the purview of GST and hence do not amount to supply under GST law.
RULING
1) The incomes received towards (i) salary /remuneration as a Non Executive Director of a private limited company, (ii) renting of commercial property and (iii) renting of residential property and (iv) the values of amounts extended as deposits/loans/advances out of which interest is being received are to be included in the aggregate turnover, for registration.
2) The income received from renting of residential property is to be included in the aggregate turnover, though it is an exempted supply.
Tags : Judgement, GST, Advance Ruling
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