Is Salary Paid to a Director Taxable Under GST?
GSTZone Desk · Updated 2026
Short answer
Salary to a director who is genuinely an EMPLOYEE of the company (TDS deducted as salary under Section 192) is NOT taxable under GST at all. But payments to a director who is NOT an employee — a non-executive or independent director paid as a professional (TDS under Section 194J) — ARE taxable, and specifically fall under reverse charge, payable by the company.
In detail
This distinction comes down to the nature of the relationship, not the job title. Schedule III excludes services provided by an employee to an employer in the course of employment from GST entirely — and a director who is genuinely employed by the company (drawing a salary, subject to salary-style TDS) fits squarely within that exclusion.
A non-executive or independent director is a different case. Their remuneration is typically structured as professional/sitting fees rather than salary, with TDS deducted under Section 194J (fees for professional or technical services) rather than Section 192 — a strong signal that GST treats them as an independent service provider to the company, not an employee.
Where GST does apply to director remuneration, the mechanism is reverse charge, not the director charging GST on an invoice — the company itself pays the applicable GST directly to the government on the value of that remuneration.
GSTZone tip
Check which TDS section applies to each director’s payments before assuming their entire remuneration is GST-free just because they’re called a ‘director’ — the actual employment relationship, reflected in the TDS treatment, is what decides the GST position.
Related questions
What about sitting fees paid to an executive director for board meetings?+
If the person is genuinely an employee-director drawing salary, additional sitting fees for board meetings are generally viewed in that same employment context; the specific facts matter here, so this is worth confirming for an unusual pay structure.
Can the company claim ITC on the GST paid under reverse charge for a non-executive director’s fees?+
Yes, generally — GST paid under reverse charge on a genuine business expense like director remuneration is eligible for input tax credit, subject to normal ITC conditions.
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