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TMI Blog2019 (10) TMI 793X X X X Extracts X X X X X X X X Extracts X X X X ..... pplies received as the services of the employee to his employer in the course of his employment is not a supply of goods or supply of services and hence the same is not liable to tax. Remuneration to the Directors paid by the applicant - HELD THAT:- The question before us is not whether this service is taxable or not, but whether this supply of services is liable to tax under reverse charge mechanism. The services provided by the Directors to the Company are not covered under clause (1) of the Schedule III to the Central Goods and Services Tax Act, 2017 as the Director is not the employee of the Company. The consideration paid to the Director is in relation to the services provided by the Director to the Company and the recipient of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cally are liable to tax b) Whether RCM is applicable on remuneration paid to the Directors. 3. The applicant furnishes some facts relevant to the stated activity: a. The applicant states that they are in the business of providing Consultancy services, like surface survey and map making, Project management consultancy services for construction projects, Engineering Advisory services and technical testing analysis services etc. to the General Public, State Government Agencies, and Central Government throughout the country. b. The applicant states that while providing the above said services, some of the expenses are incurred by their employees on behalf of the Company, the details of which are as follows: i. Travelling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.1 The facts presented by the applicant have been examined and its found that the applicant s employees incur expenses on behalf of the company in the course of employment and the said amounts are reimbursed by the applicant on periodical basis. These expenses are incurred by the applicant and are only paid by the employee and later on reimbursed to the employee by the applicant. The issue is whether the amount paid as reimbursement of the expenses paid by the employee amounts to a supply liable to tax. 4.2 Services by an employee to the employer in the course of or in relation to his employment are covered under Clause 1 of the Schedule III which relates to the activities or transactions which shall be treated neither as a Supply o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m consideration as if it is paid by the applicant himself for the services received by them on behalf of the company. This amount reimbursed by the applicant to the employee later on would not amount to consideration for the supplies received as the services of the employee to his employer in the course of his employment is not a supply of goods or supply of services and hence the same is not liable to tax. However, if any tax is applicable, it is on the services received by the employee on behalf of the applicant in the course of his employment, irrespective of the fact that it is paid by the applicant or the employee and later reimbursed by the applicant. 5. Regarding the remuneration to the Directors paid by the applicant, the servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid 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 In the present case, the applicant is the company and is located in the taxable territory and the Directors remuneration is paid for the services supplied by the Director to the applicant company and hence the same is liable to tax under reverse charge basis under section 9(3) of the Central Goods and Services Tax Act, 2017. 6. The conclusions drawn in reference to the Central Goods and Services Tax Act 2017 are also applicable mutatis mutandis to the Karnataka Goods and Services Tax Act and Integrated Goods and Services Tax Act, 2017 also as si ..... X X X X Extracts X X X X X X X X Extracts X X X X
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