GST & Indirect Tax

GST on Director Sitting Fees and RCM

Finin2min GST Desk·June 2026·8 min readDIRECTORS

Director payments are easy to misclassify. Sitting fees and payments for director services can fall under reverse charge when covered by Notification 13/2017, while salary-like employment payments require a different analysis. Finance teams should separate board fees from payroll before filing GSTR-3B.

Use the Finin2min GST Services Rate Master to apply these points to your figures or facts.

Start with classification

Notification 13/2017-Central Tax (Rate) notifies categories of services on which tax is payable under reverse charge. Services supplied by a director of a company or body corporate to the company/body corporate are a common RCM control item. However, not every payment to a director has the same GST treatment; employment relationship and nature of payment must be checked.

For the connected rule, example or next step, see GST on Import of Services Under RCM.

Director payment matrix

Payment type	GST control	Evidence
Sitting fees	Check RCM applicability under notification.	Board attendance, fee approval, voucher.
Commission to non-executive director	Review as director service / RCM.	Board/shareholder approval, invoice/debit note.
Salary to whole-time director	Check employment facts separately.	Employment contract, payroll, TDS treatment.
Reimbursement	Check pure reimbursement vs consideration.	Expense proofs and policy.

For the connected rule, example or next step, see GST Registration Amendment for Address, Partner or Director Change.

RCM accounting controls

Create a monthly list of director payments approved by company secretary/finance.
Tag each payment as sitting fee, commission, salary, reimbursement or other service.
Where RCM applies, pay tax through cash ledger and report in GSTR-3B.
Claim ITC only after applying Section 16/blocked-credit checks.
Keep board minutes, payment approval and GST working paper together.

Common mistakes

Treating all director payments as salary without documentation.
Missing RCM because the director is not GST registered.
Not raising self-invoice/payment voucher where applicable in internal process.
Claiming ITC without checking business use and documentation.

Finin2min publishing checklist before upload

Verify Notification 13/2017 and any later amendments before publishing.
Do not give a blanket answer for whole-time directors; facts matter.
Cross-link to import services RCM and legal services RCM articles.

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Make this a monthly finance controlKeep a working paper with invoice data, portal data, source law reference and reviewer sign-off for each GST risk area.

Open GST Resources →

Official References Used

This draft uses official GST law, rules, GST Council, CBIC/GST portal and e-invoice/e-way bill portal sources only. Before publishing, re-check whether any notification, circular, rule text or portal workflow has changed after the draft date.

Frequently Asked Questions

Is GST payable on director sitting fees under RCM? ▼

Payments for services supplied by a director to a company/body corporate should be reviewed under Notification 13/2017 RCM entries.

Does the director need GST registration for company to pay RCM? ▼

RCM liability can apply to the recipient company based on the notified service, regardless of whether the supplier charges GST.

Is whole-time director salary also RCM? ▼

Do not assume. Salary paid under an employer-employee relationship requires separate analysis and documentation.

Source and review trail

Use the current official instrument, portal or regulator publication before acting. This panel separates the category authority from page-specific references.

Primary category: GST & Indirect Tax
Official starting point: www.gst.gov.in