Gst applicability for security service providing company
This query is : Resolved
22 August 2019
Dear All,
Please let me know is GST applicable for a Security Service providing company which in-house manufactures uniforms, shoes for their security guards and also can such company avail GST Input Credit on purchase of raw materials and Input services for manufacture of such goods?
Please let me know is GST applicable for a Security Service providing company which in-house manufactures uniforms, shoes for their security guards and also can such company avail GST Input Credit on purchase of raw materials and Input services for manufacture of such goods?
22 August 2019
There are two type of activity involved . One is security service provider and other is making shoes , uniform of your own employees ( security guards )
Your recipient will be liable to pay GST on security services with effect from 01.01.2019 , in case you are not a body corporate .
(Any Registered Person receiving security services (Service provided by way of supply of security personnel) from any person other than a body corporate is required to pay GST on reverse charge basis.)
In my view , GST is not applicable on making of uniform and shoes for your employees and thus ITC is also not available on input for the task .
Your recipient will be liable to pay GST on security services with effect from 01.01.2019 , in case you are not a body corporate .
(Any Registered Person receiving security services (Service provided by way of supply of security personnel) from any person other than a body corporate is required to pay GST on reverse charge basis.)
In my view , GST is not applicable on making of uniform and shoes for your employees and thus ITC is also not available on input for the task .
Message likes :
1 times
22 August 2019
Thank you madam for your time and advice.
But in this case Company is using uniform for security guards to provide further Taxable Service, so can this company we avail GST Input Credit on purchase of Raw material and Input service?If you have then please provide appropriate provisions/sections.
Thank you.
But in this case Company is using uniform for security guards to provide further Taxable Service, so can this company we avail GST Input Credit on purchase of Raw material and Input service?If you have then please provide appropriate provisions/sections.
Thank you.
26 July 2024
For a company providing security services and also in-house manufacturing uniforms and shoes for its security guards, GST implications are as follows:
### **1. Applicability of GST on Security Services**
GST is applicable to security services provided by a company. The relevant provisions are:
- **HSN Code for Security Services**: 9985
- **GST Rate**: 18% (9% CGST + 9% SGST) for security services provided in India.
### **2. GST Input Credit on Purchase of Raw Materials and Input Services**
Since the company is providing taxable security services, it can claim input tax credit (ITC) on the GST paid for raw materials and input services used in manufacturing uniforms and shoes, provided certain conditions are met. The key provisions are:
- **Section 16 of the CGST Act, 2017**: Provides the right to claim input tax credit on inputs, input services, and capital goods used to provide taxable supplies.
#### **Conditions for Availing ITC**:
1. **Inputs and Input Services for Manufacturing Uniforms**:
- The raw materials used in manufacturing uniforms and shoes are eligible for ITC if they are used to provide taxable security services.
- ITC can be claimed on raw materials, such as fabrics, and services, such as stitching, if these are used to manufacture uniforms and shoes.
2. **Provisions**:
- **Section 17(5) of the CGST Act**: Specifies certain items for which ITC is not available, such as goods and services used for personal consumption, but uniforms and shoes for security personnel used in providing taxable services are not excluded.
3. **Documentation**:
- Maintain proper documentation, including purchase invoices with GST details, and ensure the vendor has filed GST returns correctly.
### **3. GST on Uniforms and Shoes Used by Security Guards**
Since the uniforms and shoes are used for the purpose of providing taxable security services, the ITC on their procurement is permissible.
### **Relevant Sections and Rules**:
- **Section 16 of the CGST Act, 2017**: Provides the entitlement to input tax credit on inputs and input services used to make taxable supplies.
- **Section 17(5) of the CGST Act, 2017**: Lists out the exceptions to ITC, but uniforms for security personnel do not fall under these exceptions.
- **Rule 36 of the CGST Rules**: Deals with the conditions for availing ITC and documentation required.
### **Example Scenario**
1. **Purchase of Raw Materials**: The company buys fabrics and other raw materials with GST for making uniforms.
- **ITC**: The company can claim ITC on the GST paid for these raw materials because they are used to produce taxable services (security services).
2. **Purchase of Input Services**: The company avails services for manufacturing uniforms.
- **ITC**: The company can claim ITC on the GST paid for these services, as they contribute to the manufacturing of uniforms used in providing taxable services.
### **Conclusion**
- **GST is applicable** on security services at a rate of 18%.
- **ITC is available** on raw materials and input services used for manufacturing uniforms and shoes, provided they are used to supply taxable security services.
- Ensure compliance with documentation and filing requirements to correctly claim ITC.
For any complex scenarios or specific cases, consulting a GST expert or tax advisor is recommended to ensure full compliance with GST laws and to resolve any specific queries you might have.
### **1. Applicability of GST on Security Services**
GST is applicable to security services provided by a company. The relevant provisions are:
- **HSN Code for Security Services**: 9985
- **GST Rate**: 18% (9% CGST + 9% SGST) for security services provided in India.
### **2. GST Input Credit on Purchase of Raw Materials and Input Services**
Since the company is providing taxable security services, it can claim input tax credit (ITC) on the GST paid for raw materials and input services used in manufacturing uniforms and shoes, provided certain conditions are met. The key provisions are:
- **Section 16 of the CGST Act, 2017**: Provides the right to claim input tax credit on inputs, input services, and capital goods used to provide taxable supplies.
#### **Conditions for Availing ITC**:
1. **Inputs and Input Services for Manufacturing Uniforms**:
- The raw materials used in manufacturing uniforms and shoes are eligible for ITC if they are used to provide taxable security services.
- ITC can be claimed on raw materials, such as fabrics, and services, such as stitching, if these are used to manufacture uniforms and shoes.
2. **Provisions**:
- **Section 17(5) of the CGST Act**: Specifies certain items for which ITC is not available, such as goods and services used for personal consumption, but uniforms and shoes for security personnel used in providing taxable services are not excluded.
3. **Documentation**:
- Maintain proper documentation, including purchase invoices with GST details, and ensure the vendor has filed GST returns correctly.
### **3. GST on Uniforms and Shoes Used by Security Guards**
Since the uniforms and shoes are used for the purpose of providing taxable security services, the ITC on their procurement is permissible.
### **Relevant Sections and Rules**:
- **Section 16 of the CGST Act, 2017**: Provides the entitlement to input tax credit on inputs and input services used to make taxable supplies.
- **Section 17(5) of the CGST Act, 2017**: Lists out the exceptions to ITC, but uniforms for security personnel do not fall under these exceptions.
- **Rule 36 of the CGST Rules**: Deals with the conditions for availing ITC and documentation required.
### **Example Scenario**
1. **Purchase of Raw Materials**: The company buys fabrics and other raw materials with GST for making uniforms.
- **ITC**: The company can claim ITC on the GST paid for these raw materials because they are used to produce taxable services (security services).
2. **Purchase of Input Services**: The company avails services for manufacturing uniforms.
- **ITC**: The company can claim ITC on the GST paid for these services, as they contribute to the manufacturing of uniforms used in providing taxable services.
### **Conclusion**
- **GST is applicable** on security services at a rate of 18%.
- **ITC is available** on raw materials and input services used for manufacturing uniforms and shoes, provided they are used to supply taxable security services.
- Ensure compliance with documentation and filing requirements to correctly claim ITC.
For any complex scenarios or specific cases, consulting a GST expert or tax advisor is recommended to ensure full compliance with GST laws and to resolve any specific queries you might have.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Is this income indian or foreign income?
- 15ca /15cb whose income tax login? remitter or nri seller's login?
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- GST on export of services and Input Credit
- ITC temporary reversal and reclaim
- TDS U/S. 194NF
- Regarding Documentation & Compliances for Opening of Unit of Pvt Ltd.
- Inventory of finished goods
- Applicable TDS rate for sale of property in Nov 2024
- GST ON EXPORT COMMISSION
- Stock difference tax applicable on composite rate or normal rate
- LAST YEAR 2022-23 ITC IN NEXT YEAR 2023-24 REPORITNG IN GSTR-9
- MIS MATCH OF INVOICE NUMBER
- IGST Credit-Show cause notice issued-confusion
- Issue of gst e invoice
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
- Query for dubts
- Regarding einvoice taken on nil rated sales
Trending Online Classes
CAclubindia
