17. Services by the members of the overseeing committee to Reserve Bank of India
Supplier :- Members of overseeing committed constituted by RBI
Recipient :- Reserve Bank of India
As per this entry, where members of such committee provide services to the RBI, the liability to pay GST falls on the RBI under RCM, and the individual members supplying the service are not liable to charge or deposit GST.
The Overseeing Committee is constituted by the Reserve Bank of India under its regulatory and supervisory powers, primarily to evaluate proposals for resolution of stressed assets under frameworks such as the S4A (Scheme for Sustainable Structuring of Stressed Assets) or similar regulatory mechanisms. The members of this committee are usually eminent individuals appointed by RBI to examine and approve restructuring proposals submitted by banks for large stressed accounts. They function in an advisory and evaluative capacity and are compensated by the RBI for their professional services.
Since these members are usually professionals or retired executives acting in their individual capacity and may not be engaged in any commercial enterprise, the government has provided for RCM to shift the GST compliance burden to the RBI. This mechanism ensures that the individuals are not required to obtain GST registration merely for their engagement on the committee and are not burdened with tax compliance for such isolated services.
For example, if Mr. X, a retired bank executive, is appointed as a member of the Overseeing Committee by RBI and is paid a monthly honorarium of Rs. 50,000, then RBI is liable to pay 18% GST under RCM on such payment. Mr. X is not required to raise a GST invoice or register under GST, provided he is not otherwise liable to register for other taxable supplies.
It is important to note that this entry applies specifically to services provided by members of the Overseeing Committee constituted by RBI, and not to any other type of engagement or advisory services offered to RBI. If a person provides any other kind of consultancy or professional service to RBI, outside the scope of this committee, the general GST provisions would apply based on their registration status and turnover.
In conclusion, services supplied by members of the Overseeing Committee to the Reserve Bank of India are covered under RCM, and the liability to discharge GST rests with the RBI. This entry ensures that eminent individuals who serve on these committees are relieved from the burden of tax compliance for these services, while the recipient entity (RBI) fulfills the tax obligations as per law.