Taxability of security services under GST - w.e.f 01.01.2019

Definition of Security services?

Security services has not been defined under GST Act. However, it can understand with general definition as security service is a service wherein a person supplies security personnel service to another person for a consideration.

Definition of Reverse Charge?

As per section 2(98) of CGST Act’ 2017, “Reverse Charge” means the liability to pay tax by the recipient of the supply of goods or services or both instead of the supplier of such goods or services or both under section 9(3)/9(4) of CGST Act, 2017.

Applicability of GST

As per Section 9(3) read with Notification 13/2017 as amended by CGST Notification rate 29/2018 dt.31.12.2018, following entry has been inserted:-

Security services (services provided by way of supply of security personnel) provided

  • to a registered person located in the taxable territory

  • by any person other than a body corporate.

Provided that nothing contained in this entry shall apply to, –


(a) a Department or Establishment of the Central Government or State Government or Union territory; or

(b) local authority; or

(c) Governmental agencies; which has taken registration under the Central Goods and Services Tax Act, 2017 (12 of 2017) only for the purpose of deducting tax under section 51 of the said Act and not for making a taxable supply of goods or services; or

(ii) a registered person paying tax under section 10 of the said Act.


  • Body Corporate” as per above notification has the same meaning as assigned to it in clause (11) of section 2 of the Companies Act, 2013.

  • Body corporate broadly means a corporate entity which has a legal existence. The term "body corporate" is defined in Section 2(11) of the Companies Act, 2013. This includes a private company, public company, one personal company, small company, Limited Liability Partnerships, foreign company etc. but does not include a co-operative society registered under any law relating to co-operative societies.

  • RCM is applicable only when the security service is provided to a registered person located in taxable territory.

  • RCM on Security service is applicable only when the supplier of service is any person (other than a body corporate).

  • For eg. - If a Proprietary Concern or a Partnership Firm provides security services to a registered person whether body corporate or other than body corporate - then RCM is applicable.

  • For e.g.- If any Company or LLP providing Security services to a body corporate or other than body corporate, then supplier of service shall pay GST under forward charge and it does not attract RCM.

  • If recipient of service is not a registered person then GST liability to be paid by supplier on forward charge even if he is not a body corporate.

  • RCM is not applicable for a registered person who has taken registration as a Composition dealer under section 10 of the CGST Act 2017.

Time of supply for Services (Security Service)

In case of Forward charge

The time of supply of services shall be the earliest of the following dates, namely:—

(a) the date of issue of invoice by the supplier, if the invoice is issued within the period prescribed under section 31 or the date of receipt of payment, whichever is earlier; or (b) the date of provision of service, if the invoice is not issued within the period prescribed under section 31 or the date of receipt of payment, whichever is earlier; or (c) the date on which the recipient shows the receipt of services in his books of account, in a case where the provisions of clause (a) or clause (b) do not apply:

In case of reverse charge

(a) the date of payment as entered in the books of account of the recipient or the date on which the payment is debited in his bank account, whichever is earlier; or (b) the date immediately following sixty days from the date of issue of invoice or any other document, by whatever name called, in lieu thereof by the supplier:

Provided that where it is not possible to determine the time of supply under clause (a) or clause (b), the time of supply shall be the date of entry in the books of account of the recipient of supply.

Supplier liable to registration

As per Section 23(2) read with Notification No. 5/2017 – Central Tax

  • The Central Government specified the persons who are only engaged in making supplies of taxable goods or services or both, the total tax on which is liable to be paid on reverse charge basis by the recipient of such goods or services or both under sub-section (3) of section 9 of the said Act as the category of persons exempted from obtaining registration under the aforesaid Act.

Thus, if any supplier( other than body corporate) supply services to registered taxpayer (whether body corporate or not), then GST liability will be on the recipient and recipient will be liable to pay GST on reverse charge. Hence, Supplier will not be liable to get registered.

But, if any supply of service by supplier is made to unregistered person, then he will be liable to get registered after exhausting threshold limit of "aggregate turnover"* of Rs. 20 lakh/10 lakh as the case may be.

*aggregate turnover” means the aggregate value of all taxable supplies** (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess.

**Taxable supply” means a supply of goods or services or both which is leviable to tax under Central Goods and Service Tax Act, 2017.

Hence composite reading of above definitions, while computing the threshold limit of Rs. 20 lakh/10 lakh, all the supplies on which tax has been paid on RCM by recipient shall also be considered.

ITC of GST paid on Reverse charge basis

A supplier of goods or service cannot avail input tax credit where the liability of tax to be paid is on the recipient of goods or services.

A recipient of goods and services can avail the input tax credit for the amount discharged by him under reverse charge in cash paid.


With the enactment of GST Act, 2017 the concept of RCM on security services was abolished and the supplier of security service was made liable to pay GST.

Considering the numerous problems in tax collection from small security service providers, such service has been brought under the purview of RCM in certain cases as discussed above. Hence, RCM on Security Services has been introduced in GST by the Government vide Notification No. 29/2018-Central Tax (Rate) dated 31.12.2018.

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