Security personnel v/s manpower supply

[Ashok Chopra]

Will security personnel depoloyed  by security agency at the unit  be considered as 'SUPPLY OF MANPOWER FOR ANY PURPOSE' and does it become our liability to pay 75% Service Tax on secutiy agency bill as per Notification No. 30/2012-ST dated 20-06-2012 because in the bill raised by security agency clearly shows number of duties by security guards and security supervisors at our unit.

Please advice accordingly

[JAMES PG]

If the contract given to a Security agency is clearly for providing security service and the servcie provided is purely security service, it will not fall under the definition of manpower supply. If you are hiring manpower  from a Contractor and deploying them for security coverage pr for any other purpose under your superintndence and control,  then it will fall under manpower supply liable to reverse charge

[YAGAY andSUN]

Correctly explained by Mr. James PG.

[Jayant Kuvelkar]

For a body corporate, it will be safer to pay 75% under reverse charge to avoid imminent controversies. After all it is not an expenditure as they can take credit of the tax. It has to be remembered that the main objective to bring such services eg. labour supply contractors, security services, small contractors under reverse charge was the innumerable frauds committed by such service providers of not paying the service tax collected to Govt.

[hubert fernandes]

please refer draft circular 354/127/2012-TRU

[JAMES PG]

Vide  Notn No 45/2012 dated 7.08.12, Govt has amended Not No 30/12 dated 20.06.12 so as to include Security services also. Hence reverse charge will be applicable for Security services also wef 7.08.12

AI Summary

Reverse charge on manpower supply: security agency services may attract reverse charge when personnel are deployed under recipient's control. Whether services by a security agency are Supply of Manpower depends on contract character and control: if the agency provides security and retains operational control, it is a security service and not manpower supply; if personnel are hired and deployed under the recipient's supervision, it is supply of manpower and reverse charge applies. The notification regime was amended to include security services when statutory conditions are satisfied.