Unregistered person providing security services to registered person

[LAKSHMINARAYANAN TR]

When an unregistered person providing a security services to registered person, whether RCM is applicable for these transactions as per Notification 12/2017? As sec 9(4) is omitted ( relevant only for Promoters in real estate transactions), can we say this transaction per se won't attract GST as its provided by unregistered person? If so, RCM also not applicable. However, sec 2(84) person includes various legal person where registration under GST is not relevant becomes a conflict.

[Amit Agrawal]

Security services (services provided by way of supply of security personnel) provided to 'a registered person (barring certain exceptions)' by 'any person other than a body corporate' is liable under RCM as per Serial No. 14 of Notification No. 13/2017- Central Tax (Rate) (as amended from time to time till date) read with Section 9(3) of the CGST Act, 2017.

Above-said liability under RCM can NOT be avoided merely because supplier of such services is not liable to take registration under GST for any reason.

I have not understood the context of you quoting Notification No. 12/2017- Central Tax (Rate) or omission of Section 9(4) or Section 2(84). Request you to kindly elaborate the context of your query.

These are ex facie views of mine and the same should not be construed as professional advice/suggestion.

[Padmanathan KV]

I agree with views of Ld friend Amit ji.

Security Service is a Notified Service under section 9(3). Hence, RCM is applicable here under section 9(3).

Section 9(4) is independent and does not have a bearing on RCM payable under section 9(3). There seems to be no conflict between the said provisions.

[Murari Agrawal]

Dear Experts I have a question in this regard that since the service provider is unregistered the credit will not be reflected in GST portal, how can we get credit of RCM tax paid for such supply.

[Padmanathan KV]

Credit is availed on the basis of self invoice. Hence, reflection in GSTR-2A is not necessary to avail ITC.

AI Summary

Reverse charge mechanism applies to security services to registered recipients, obliging recipient to pay tax and claim ITC via self-invoice. Reverse charge liability applies to security services supplied to a registered person by non-body corporate suppliers, and this liability cannot be avoided because the supplier is unregistered. The recipient must discharge tax under reverse charge and may claim input tax credit on the basis of a self-invoice without requiring the supplier's invoice to appear in portal transaction listings.