Dogs Security

[Kaustubh Karandikar]

XYZ(Proprietor) is providing ‘Dogs’ to PQR (Body Corporate) for security of their factory premises. Is PQR liable to pay GST under reverse charge or XYZ need to pay under forward charge?

[Alkesh Jani]

Sir,

In this regards, I am of the view that, the Sl.No.14 of Notification No. 13/2017 amended vide Notification No. 29/2018, with effect from 1.1.2019, security service i.e. supply of security personnel are covered under RCM, various security services, as classified under HSN code 998521 to 998529, but only Security Services by way of supply of security personnel means persons (humans) are supplied for security purpose such as bouncers, Gun-man etc. are covered under RCM and not all Security Services.

Thanks,

With Regards

[KASTURI SETHI]

Nice reply by Sh.Alkesh Jani Ji. I agree with him. I further add that dogs cannot provide security service. Dog cannot replace human being for the purpose of security service.

In my view, supply of dogs falls under Chapter/Heading No. 0106 (Other Live animals) and this supply is exempted from GST.

 

[SHARAD ANADA]

XYZ is providing security services by using dogs and not supplying DOGS itself. In my view Chapter/Heading No. 0106 (Other Live animals) is not applicable. Service code 998525 includes Watchdog Services

Service code 998525 Guard services:

This service code includes providing protective services through hired personnel to ensure the safety of people or private, industrial and commercial properties by guarding them against fire, theft, vandalism or illegal entry, such as security patrol services, security guard services, bodyguard services, watchdog services, parking control services, access control services.

[SHARAD ANADA]

XYZ is under forward charges

[KASTURI SETHI]

Guard services (998525) do not include the security services provided by dog. The phrase "watchdog services' has nothing to do with the animal called dog. It is an idiomatic expression.A watchdog is a person or committee whose job is to make sure that companies do not act illegally or irresponsibly. If we split the word into watch dog, it is a guard dog. But here the word is one, 'Watchdog'. Means monitoring. We can say that media is playing the role of 'a watchdog' to curb social evils.

The term, "hired personnel" means people employed in an organization or engaged in an organized undertaking such as military service etc. Personnel stands for staff, employees, workforce, workers, labour force, manpower, human resources, people, men and women; crew, team, force, organization; As per legal dictionary meaning the word, 'Personnel' does not include animal. It is meant for human being only. It means "Guard Services (998525) " provided by a human being or a group of human beings'. Hence security service provided by dog is out of gamut of 'Guard Services'.

The term, 'Providing dogs' also means 'supplying' dogs.

[KASTURI SETHI]

"Watchdog services" also include security services provided by electronic/computerised devices installed at various places i.e. houses, factories, shops, offices, Govt. buildings, hospitals etc..

[Ganeshan Kalyani]

Nicely explained by Sri Kasturi Sir.

[SHARAD ANADA]

Thank you KASTURI SETHI sir for bringing my mistake in my notice. I think such service is covered under 998529 Other security services, n.e.c. This service code does not include computer security consulting services, cf. 998313. As I understood from the query supplier is not supplying dogs as sales transaction, hence Chapter/Heading No. 0106 (Other Live animals) should not be applicable. Because in any sale transaction 6 ingredients are necessary i.e. intervivos, Money Consideration, Willing buyer, Willing seller, Permanent alienation, Valid object. Here in this transaction Supplier is not seller of dog and recipient is not purchaser of dog and element of permanent alienation is missing. So its not sale transaction. and HSN of goods should not be applied. But SAC of service should be applied. Experts are requested to share their views.

[KASTURI SETHI]

Sh.Sharad Anada Ji, I agree with you in toto. You have really worked hard to trace out correct tariff code/ Chapter.

[KASTURI SETHI]

Sniffer dogs help a lot in investigation and nabbing the criminals.

AI Summary

Security service classification: whether provision of dogs constitutes taxable security services or a supply of live animals. The central issue is whether provision of dogs for factory security is a taxable security service (subject to SAC classifications and possibly reverse charge when referring to supply of security personnel) or a supply of goods under Chapter 0106 (other live animals) possibly exempt from GST. Opinions diverge: some treat it as supply of security services using dogs (service SACs including watchdog or other security services), others argue 'personnel' implies humans so RCM entries do not apply, while another view frames the transaction as sale of animals (requiring permanent alienation) rather than a service.