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Applicability of service tax in case of security servcies

Rahul Naredi (Partner) (38 Points)

09 August 2012

hi friends,

i wanted to clarify a doubt regarding the services rendered by a security service provider in light of the recent amendments in service tax rules, wherein the erstwhile classifications have been removed and as a result i am having a practical difficulty as to where should the specified service fall in.

WHETHER IT HAS TO BE TREATED AS A MANPOWER SUPPLY SERVICE attracting reverse charge mechanism or like normal services wherein i have to pay service tax @ 12.36% only to the service provider.

Would be greatful for an early reply

Thanks

Rahul

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10 Replies

DAYANANDA K N (ACCOUNTS EXCECUTIVE) (575 Points)
Replied 09 August 2012

Supply of manpower for the purpose of service tax is considered under partial reverse charge mechanisum. In notification No.36/2012 explanation given for manpower supply is - "Supply of manpower” means supply of manpower, temporarily or otherwise, to another person to work under his superintendence or control.

Going by above explantion security service will come under supply of manpower and service tax to be paid as below

On 25% of bill value by service provider

on 75% of bill value by service receiver.

Regards

Dayananda

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RENGARAJ R.K (ADVOCATE) (7557 Points)
Replied 17 August 2012

In the recent amended notification, the security services are brought under manpower and hence 25% of the bill value will be paid by service provider and 75% by service receiver. Notn 45 & 46 -ST dt 07.08.2012.

1 Like

Pankaj Jain (CA) (29 Points)
Replied 17 August 2012

Security services provided by individual, HUF,partnership firm registered or not registered to a business entity registered as body corporate then the rerevse mechnism will be applicable, refer the notification 45 dt. 7.8.2012.

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Pankaj Jain (CA) (29 Points)
Replied 17 August 2012

service tax will be charged normal if it is charged by a individual, HUF, Partnership firm or AOP to a busniess entity registered as body corporate than reverse charge mechanism will applicable otherwise full rate of tax.

1 Like

CA. and CS. BHARAT KUMAR AGARWAL (AUDIT) (32 Points)
Replied 18 August 2012

Dear Freinds,

Please confirm the Service tax liability in case of Security Service.

Our company is already service tax to the security agencies however as per notification no. 45 & 46, partial laibility to deposit the tax is imposed on service receiver also.

Can Service Receiver pay 100% tax to security Agency and they will discharge the liability as per existing practice or has to pay himself the 75%.

Thanks

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Rahul Naredi (Partner) (38 Points)
Replied 18 August 2012

the company has to deduct service tax to the extent of 25% and pay it as per the above mentioned reasons

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CA. and CS. BHARAT KUMAR AGARWAL (AUDIT) (32 Points)
Replied 18 August 2012

Originally posted by : Rahul Naredi
	the company has to deduct service tax to the extent of 25% and pay it as per the above mentioned reasons

@ Rahul: It think you are saying 75%.

Is there is any default if the co. (service receiver) pays the 100% tax to the service providers.

RENGARAJ R.K (ADVOCATE) (7557 Points)
Replied 18 August 2012

@ Rahul, Please go thro the notn and reply. The security agency will charge @ 12.36% on 25% of the Bill and balance 75% will be payable by the Company under reverse charge. The Company need not deduct 25%.