Question7: One of my client is a director in a company and receiving director remuneration of Rs. 18 lakh

above amount is neither a service or goods as per sr. no. 1 of Schedule III hence GST is not payable but director in his personal capacity receiving the commission for his services provided by him for sale of goods to any other company in this situation, Can director claim Threshold exemption of Rs.20Lakh please explain this provision proper,

Answer Where director is enters into a contract of employment with the company and receiving remuneration against FORM 16 then only this service is fall under category of Services by an employee to the employer in S.no 1 of schedule III and outside from the scope of supply in GST.

Otherwise Service supplied by Director of a company is taxable under reverse charge u/s 9(3) in S.No 6 of Notification 13/2017-Central tax.

if in your case director receive Rs 18 lakh as salary in Employee capacity then this service provided by Director is neither supply of goods nor a supply of services in GST and also does not form part of Aggregate turnover in threshold exemption of 20 lakh. Aggregate turnover is defined under section 2(6) of CGST act. as follows:-

(6) 'aggregate turnover' means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess;

Hence director eligible for threshold exemption of 20 lakh for Commission income or other services supplied by him. .(REPLY dt. 15/2/2018)