The applicant is an unregistered person. It has filed an application for advance ruling to determine whether salary received as director from a private limited company shall be considered for aggregate turnover for registration.

The Authority for Advance Ruling observed that as per the provisions of CGST Act, the aggregate turnover is equal to the sum of value of all taxable supplies, exempt supplies, export of goods or services or both and inter-State supplies of persons having same PAN to be computed on all India basis. It excludes the value of inward supplies on which tax is payable by a person on reverse charge basis and CGST, SGST, UTGST, IGST and cess.

In the given case, the applicant receives salary as director of private limited company. If the applicant is an Executive director of such company, he will be treated as employee of the company. In that case, the services of the applicant as an employee to the employer are neither supply of goods nor supply of services in accordance with Schedule III of the CGST Act. If the applicant is Non-Executive director, the remuneration paid by the company is liable to GST in the hands of company under reverse charge mechanism. The applicant has not submitted any documentary evidence to support whether the salary received by him is towards his services as Executive director or Non-Executive director.

In view of the above, in case remuneration is received by the applicant as Executive director then it is not includable in aggregate turnover, as it is the services given by the applicant as an employee. However, if the applicant receives remuneration as Non-Executive director, then the company is required to pay tax on reverse charge basis. Thus, the services of the applicant as a Non-Executive director are includable in the aggregate turnover, as it is the taxable services supplied by the applicant, even though the tax is discharged by the company.