Security service and service by director are now in reverse

Service Tax (Legacy) 1363 views 4 replies

CA Ankit Gulgulia (Jain)

B.COM (H) FCA CIFRS CBV R-ID (IICA)

5842 Points Posted on 09 August 2012

Notification No. 45/2012 - Service Tax dated 7^th August,2012 amends existing Notification 30/2012 which governs reverse charge mechanism in India. As per the amendment, following services shall be added to list of reverse charge services.

Provided or agreed to be provided by a director of a company to the said company.
Security Services

What is Security Service?

As per notification 46/2012 dated 7th August, 2012, security service means

security services” means services relating to the security of any property, whether movable or immovable, or of any person, in any manner and includes the services of investigation, detection or verification, of any fact or activity;”

Ratio of Payment

For Director’s Services the ratio shall be 100% : 0% i.e. Service recipient company shall be liable to pay service tax.
In case of Security service, the proportion shall be same as that in manpower service i.e. 75 : 25.

Changes in Service Tax Rules,1994

In concurrence with above amendment, the service tax rules have been suitably amended vide Notification No. 46/2012 - Service Tax dated 7th August, 2012.

Replies (4)

CA. Jiya

Sr. Executive

64 Points Posted on 13 August 2012

hi Ankit..

this notification is fine but what about..Control?

I mean i have read in the Reckoner that to decide Manpower service and apply reverse charge mechanism( 25:75) we need to see that whether person works under the control of Principal Employer or not.

In that Security Service was excluded and reason was given that "AS SECURITY PERSON DO NOT WORK UNDER THE CONTROL OF PRINCIPAL EMPLOYER"

Due to this Notification SHOULD WE IGNORE THE CONTROL POINT?

ARE WE REQUIRED TO VERIFY WHETHER SECURITY PERSON IS WORKING UNDER OUR CONTROL OR NOT TO APPLY REVERSE CHARGE?

Pls reply.....

RENGARAJ R.K

ADVOCATE

7557 Points Posted on 06 September 2012

In my opinion, security people are under company's supervision only though salary is received from the manpower security agent.

Shridhar Shah

Chartered Accountant in Practice

172 Points Posted on 07 September 2012

@ Jiya - Now security service is been added specifically, I believe control point is not a question.

@ RKR - security services” means services relating to the security of any property, whether movable or immovable, or of any person, in any manner and includes the services of investigation, detection or verification, of any fact or activity - so you point can't be applied in full to security services.