Which of the following statements is correct with regard to GST liability on sitting fees and salary paid to directors?

CA Final · Indirect Tax Laws · MTP · May 2026
Which of the following statements is correct with regard to GST liability on sitting fees and salary paid to directors?
(A) Sitting fees paid to the directors is liable to GST under reverse charge and the salary paid to executive directors shall not be liable to GST.
(B) Sitting fees paid to the directors is liable to GST under forward charge and the salary paid to executive directors shall not be liable to GST.
(C) Total amount payable to directors (sitting fees as well as salary) is liable to GST under reverse charge in the hands of the directors as professional income.
(D) Total amount payable to directors (sitting fees as well as salary) is liable to GST under forward charge in the hands of the directors as professional income.

Suggested Answer and Working Notes:

Correct Answer: Option (A)

Sitting fees paid to the directors is liable to GST under reverse charge and the salary paid to executive directors shall not be liable to GST.

Topics: Liability to pay tax in Certain Cases

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