TaxTMI 
TaxTMI 
TaxTMI 
2021 (1) TMI 332
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....chools, colleges, hostels etc. working under the direct or indirect control of the Gujarat Government; that although GISFS is organised by the Gujarat government, it doesn't receive any fund or grant from the Government or any organisation. 2. The applicant has submitted that there are more than 5000 security guards working under GISFS and to whom GISFS is giving employment opportunity; that GISFS is giving them salary as per Minimum Wages Act as prescribed by the authority from to time to time; that GISFS is giving its security services to almost 600 clients across Gujarat State and among them, mostly are of Government or semi government organization. 3. The applicant has submitted that with regard to current situation of GISFS for charging GST to the client, they are providing security to their clients for which they are charging the amount which they are paying to the guards as per Minimum Wages Act plus 12% as establishment charges to run their administration office and to cover their administration cost like administration staff salary, stationery, electricity of admin office etc; that out of 112%, 100% they are paying to their guards as wages and remaining 12% is utilized t....
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....cerned persons/authorities. Therefore, the wages and allowances are excludible from the value of service tax. Thus the taxable value for the purpose of levy needs to exclude these charges. The demand is modified to that extent." 5. The applicant has stated that the said matter was decided uniformly in the case of M/s. M.P. Security Force v/s. Commissioner of Central Excise and Service Tax (Bhopal/MP) by New Delhi Tribunal = 2019 (8) TMI 211 - CESTAT NEW DELHI wherein it was held that: "We, accordingly, hold that the appellant is entitled for the abatement towards the payment made on account of contribution towards ESL, EPF and PF and also through wages and salaries while computing the assessable value in terms of Section 67 of the Act for the payment of service tax." 6. The applicant vide their additional submission given vide email dated 24.09.2020 has cited the following judgements in support of their claim that reimbursable expenses are not to be added/abated to/in the assessable value of GST for charging GST on Security Guard Services and submitted scanned copies of the same: (i) Final Order No.71115/2016, dated 2-12-2016 in Appeal No. ST/70025/2015-CU(DB) and Cross Objec....
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....ax Act, 2017 are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to similar provisions of the GGST Act. 10. As per the submission of the applicant, they are providing security to their clients for which they are charging the amount which they are paying to the guards as per Minimum Wages Act plus 12% as establishment charges to run their administration office and to cover their administration cost like administration staff salary, stationery, electricity of admin office etc and they are charging GST @ 18% on Rs. 112/-(100 + 12% establishment charges) which they collect from their client and are paying GST to the Government in the same way since the incorporation of GST. The applicant has stated that they have come across a few judgements in similar cases wherein the authorities have decided to charge the taxes after abatement towards payment made on account of wages, salaries, contribution made towards PF, ESIC etc i.e. to charge the taxes after deduction of wages etc. paid to security guards and in their case GST @18% can be charged on establishment char....
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....ut tax charged on goods and services used in supplying the service has not been taken [Please refer to Explanation no. (iv)] The bill issued for supply of this service indicates that it is inclusive of charges of accommodation and transportation required for such a tour and the amount charged in the bill is the gross amount charged for such a tour including the charges of accommodation and transportation required for such a tour. (ii) Support services other than (i) above 9 ---- As per Annexure to Notification No.11/2017-Central Tax(Rate) dated 28.06.2017, the same appears at Sr.No.419 and reads as under: Sl.No. Chapter, Section, Heading or Group Service Code (Tariff) Description of Service Heading 9985 Support services 410 Group 99952 Investigation and security services. 411 998521 Investigation services 412 998522 Security consulting services 413 998523 Security systems services 414 998524 Armoured car services 415 998525 Guard services 416 998526 Training of guard dogs 417 998527 Polygraph services 418  ....
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..... v/s. M/s. Intercontinental Consultants and Technocrats pvt.ltd (Civil Appeal No.2013 of 2014) = 2015 (2) TMI 593 - SC ORDER (mentioned at Sr.No. iii above), it is observed that the said case law pertains to the period prior to 14th May, 2015, when the legislative amendments were not brought out in the Finance Act, 1994. Further, we also find that the aforementioned case has been relied upon in the case of Kassa Finwest pvt. ltd. v/s. CCE, ST, New Delhi = 2018 (12) TMI 873 - CESTAT NEW DELHI (mentioned at Sr.No.v above) and also in the case of Karvy Consultants v/s. CCE & ST, Hyderabad-II = 2019 (2) TMI 763 - CESTAT HYDERABAD (mentioned at Sr.No.vii above). However, these cases do not hold water in the GST era, since the provisions with respect to valuation are very clear in the present era of GST and are already a part of the CGST Act itself. 'Consideration' has been clearly defined in Section 2(31) of the CGST Act, 2017.Section 15 of the CGST Act, 2017 elaborates in great detail, the items that are required to be included in the value of supply. Sub-section (2) of Section 15 itself starts with the words "The value of supply shall include---" and goes on to elaborate the items re....
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....nistration staff salary, stationery, electricity of admin office etc. and that they are charging 18% GST on the total amount of Rs. 112/-. However, they have also stated that based on the various judgements, they have referred to in their application, they intend to charge GST @18% only on the establishment charges of Rs. 12/- received from their clients. However, as can be seen from the above, consideration would include the entire payment received by the applicant from their clients and GST would be payable on the entire amount collected by them from their client, which includes the salary amount/wages etc. to be paid to the Security Guards as well as the establishment charges to run their administration office and to cover their administration cost like administration staff salary, stationery, electricity of admin office etc. 16. We would also like to refer to Section 15 of the CGST Act, 2017, which pertains to Valuation of taxable supply and reads, as under: "15. (1) The value of a supply of goods or services or both shall be the transaction value, which is the price actually paid or payable for the said supply of goods or services or both where the supplier and the recipien....
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....med to be "related persons" if-- (i) such persons are officers or directors of one another's businesses; (ii) such persons are legally recognised partners in business; (iii) such persons are employer and employee; (iv) any person directly or indirectly owns, controls or holds twenty-five per cent. or more of the outstanding voting stock or shares of both of them; (v) one of them directly or indirectly controls the other; (vi) both of them are directly or indirectly controlled by a third person; (vii) together they directly or indirectly control a third person; or (viii) they are members of the same family; (b) the term "person" also includes legal persons; (c) persons who are associated in the business of one another in that one is the sole agent or sole distributor or sole concessionaire, howsoever described, of the other, shall be deemed to be related." 17. On going through the above, it can be seen that Section 15(1) clearly stipulates that the value of supply of goods or services or both shall be the transaction value, which is the price actually paid or payable for the said supply of goods or services or both where the supplier and the recipient of the sup....