GST authorities seek details of directors' remuneration, tax paid: Report

Goods & Service Tax (GST) authorities in some state have asked companies to provide information on remuneration paid to directors and the tax paid on them.

The move comes after the Authority of Advance Ruling (AAR) in two states issued contradictory orders, The Economic Times reported. GST authorities have sent notices to companies in this regard.

The AAR in Karnataka said directors' remuneration is not under the scope of GST, but AAR Rajasthan said it qualifies for GST.

Moneycontrol could not independently verify the report.

"The conflicting advance ruling judgments on GST applicability on director’s remuneration has caused doubt in the minds of authorities at the field level, potentially causing unnecessary litigation," Bipin Sapra, a partner at EY, told the newspaper.

GST officials in Chhattisgarh, Uttar Pradesh and Maharashtra and some other states have also sent notices to companies requesting details of directors' remuneration, sources told the paper.

Some companies have been sent memorandums that threaten action if the information is not provided within a week. The report said the memorandums were issued on May 12.

"Even though AAR ruling applies only to applicants who seek clarity on interpretation of laws, still authorities in different tax jurisdictions are taking cognisance of this ruling and issuing notices," Rajat Mohan, a senior partner at AMRG Associates told the paper.