Goods and services tax authorities in some states have sent notices to companies seeking information about the remuneration of directors and the tax paid on them. This comes as only a few companies have started operations following the staggered opening up of the nationwide lockdown to counter the Covid-19 outbreak.

The inquiries come on the heels of conflicting orders passed by the Authority of Advance Ruling in two states on the applicability of GST on the remuneration of directors. The AAR Rajasthan said director remuneration is under the ambit of GST, while the AAR Karnataka ruled it was not.

“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,” said Bipin Sapra, a partner at EY.

The tax authorities in states including Chhattisgarh, Uttar Pradesh and Maharashtra have sent out the notices seeking information, said people familiar with the matter.

Source : Financial Express