Security Services under GST, In general terms the Security Service means service rendered by any person towards the security of any movable or immovable property or security of any person in any manner. In Service Tax Regime, security services provided by individual, HUF or partnership firm to a body corporate were covered under Reverse Charge Mechanism (RCM). However, The concept of RCM on security services was abolished and the supplier of security service was made liable to pay GST after the implement of Goods and Services Tax Act, 2017 .
After considering the various problems in tax collection from small security service providers, such type of service has been brought under the ambit of RCM. Hence, RCM on Security Services has been introduced in GST by the Government vide Notification No. 29/2018-Central Tax (Rate) dated 31.12.2018. w.e.f 1st Jan 2019, any registered person receiving Security services (services provided by way of supply of security personnel) from any person other than a body corporate is required to pay GST on RCM basis.
GST on Security Service was payable under Forward Charge Mechanism and Payment of GST on Security Service GST on Security Service was payable by the service provider From 1st July 2017 to 31st December 2018.
Payment of GST on Security Service on or after 1st January 2019 is to be made under reverse charge mechanism Vide notification no. 29/2018 – Central Tax (Rate) dated 31st December 2018.
Reverse Charge Mechanism is applicable on the Security Service if the below mentioned conditions gets satisfied.
| Description of Service | Service Provider | Service Receiver |
|---|---|---|
| Security services (services provided by way of supply of security personnel) provided to a registered person: Provided that nothing contained in this entry shall apply to, – (i)(a) a Department or Establishment of the Central Government or State Government or Union territory; or (b) local authority; or (c) Governmental agencies; which has taken registration under the Central Goods and Services Tax Act, 2017 (12 of 2017) only for the purpose of deducting tax under section 51 of the said Act and not for making a taxable supply of goods or services; or (ii) a registered person paying tax under section 10 of the said Act. |
Any person other than a body corporate |
A registered person, located in the taxable territory. |
Reverse Charge Mechanism will be applicable in the below mentioned cases
- A registered person paying tax under Composition Scheme; and
- A Department/establishment of the Central/State Government or the Union territory; a local authority or a Government agency who has taken GST registration only for the purpose of TDS payment under Section 51.
Input Tax Credit
A recipient of goods and services can avail the input tax credit for the amount discharged by him under reverse charge. Credit can be availed only when the liability is discharged and not before that.
A supplier of goods or service cannot avail input tax credit where the liability of tax to be paid is on the recipient of goods or services.