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d) 2 commercial shops are given on rent to partnership firm for running Garments business.

Determine tax payable in each case.
Answer:-
Legal Provision:-
As per Sec 9(3), services supplied by way of renting of residential dwelling by any person to a registered
then under reverse charge registered person is liable to pay tax.

Also as per exemption N/N 12/2017, services by way of renting of residential except where the
residential dwelling is rented to a register person is exempt from tax.
Discussion:-
a) Renting of Flat -1 to Mr. B, a salaried un-registered person is exempt from payment of GST.

b)Renting of flat -2 to XYZ Ltd. a registered person for use of guesthouse is liable to GST under reverse
charge & XYZ Ltd. is liable to pay tax.
c) Exemption is available only if flat is given on rent only for residence purpose. In given case, eventhough
Mr. C is un-registered person but he is using flat for official purpose hence renting service is taxable
under forward charge & Mr. Ram is liable to pay tax.

d) Exemption is not available to renting of commercial place & also in this case there is no provision of reverse
charge. Hence Mr. Ram is liable to pay tax on renting of 2 commercial shops under forward charge.

Services by Director
CCP 03.02.06.00
Mr. Priyam, director of Sun Moon Company Private Limited, provided service to the company for
remuneration of 1,25,000. Briefly answer whether GST is applicable in the below mentioned ₹
independent cases? If yes, who is liable to pay GST?

(I) Mr. Priyam is an independent director of Sun Moon Company Private Limited and not an
employee of the company.
(ii) Mr. Priyam is an executive director, i.e. an employee of Sun Moon Company Private Limited. Out

of total remuneration amounting to 1,25,000, 60,000 has been declared as salaries in the books ₹ ₹
of Sun Moon Company Private Limited and subjected to TDS under section 192 of the Income-Tax
Act (IT Act). However, 65,000 has been declared separately other than salaries in the Sun Moon ₹
Company Private Limited's accounts and subjected to TDS under section 194J of the IT Act as

professional services. [CA Inter RTP May 21]
Answer -

i. Legal Provision:-
Ü As per Para I of Schedule III of the CGST Act, services by an employee to the employer in the

course of or in relation to his employment are non-supplies, i.e. they are neither supply of goods
nor supply of services.
Ü As per section 9(3) of CGST Act, if services are provided by director to the company located in
taxable territory, then the company is liable to pay tax under reverse charge.
Discussion & Conclusion:-

Ü Mr. Priyam, being an Independent director, is not an employee of the company.
Ü Hence, remuneration paid to them as consideration for providing services are clearly outside the
scope of Schedule III of the CGST Act and are therefore taxable.

Ü Thus, GST is applicable in this case and Sun Moon Company Private Limited is liable to pay GST.

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