XYZ(Proprietor) is registered with GST for the Security Services provided to PQR (Pvt. Ltd. Company) registered with GST. XYZ is charging GST on which PQR is taking credit. Is this correct or XYZ cannot charge GST and PQR need to pay GST under reverse charge and then take input tax credit on it?
Reverse Charge
Kaustubh Karandikar
Security Services by Non-Corporate Entities Subject to Reverse Charge; PQR Must Pay GST Under Notification No.13/2017. A discussion on a forum addressed whether a proprietor, XYZ, providing security services to a private limited company, PQR, should charge GST or if PQR should pay under the reverse charge mechanism. The consensus among respondents was that, according to Notification No.13/2017-Central Tax (Rate) and its amendments, security services provided by non-corporate entities are subject to reverse charge. Therefore, PQR, as the service recipient, must pay GST under reverse charge, and XYZ should not charge GST. Compliance requirements for the supplier were also noted if they choose to remain registered. (AI Summary)