No GST on salary to full-time directors

The Authority for Advance Ruling in Karnataka has put to rest the controversy on whether GST is applicable on remuneration paid to directors of a company. In its order dated May 4, the AAR bench has clarified that GST will not be applicable on remuneration paid to a director if the director is a full-time employee of the company. However, if the director is a non-executive or independent director, then remuneration paid in such a case will attract GST under reverse charge mechanism.