GST applicability on Security Agency Services in India

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Security services play a vital role in safeguarding people, property, and business establishments. In India, the provision of such services is treated as a taxable supply under the Goods and Services Tax (GST) regime. A security agency typically deploys personnel such as guards, watchmen, and armed or unarmed security staff to its clients on a contractual basis.

The GST law specifically covers “security services” and prescribes their taxation under both forward charge and reverse charge mechanisms (RCM), depending on the category of the service recipient. Generally, these services attract GST at the standard rate of 18%, ensuring uniformity in taxation across the country.

1. Meaning of Security Agency Service

“Security agency service” means providing security personnel (armed/unarmed guards, bouncers, watchmen, etc.) to safeguard people, property, or premises.

2. GST Rate

  • The standard GST rate on security services (services provided by a security agency) is 18% (9% CGST + 9% SGST).
  • This applies whether the service is manpower supply or full-fledged security arrangements.

3. Reverse Charge Mechanism (RCM)

GST liability depends on the recipient:

  • If recipient is a registered business (company, LLP, partnership, firm, society, cooperative society, trust, etc.):
    👉 GST is payable under RCM (Reverse Charge Mechanism).

    • The service provider (security agency) should not charge GST on invoice.
    • The recipient (business entity) must pay GST @ 18% on the invoice value and can claim ITC (if eligible).
  • If recipient is an individual, proprietary concern, or unregistered entity (like for household/personal use):
    👉 GST is payable under forward charge by the security agency itself.

4. Example

  • A security agency provides 5 guards to a Pvt. Ltd. company (registered under GST).
    • Security agency issues invoice without GST.
    • The company pays GST @ 18% under RCM.
    • The company can avail ITC.
  • A security agency provides 1 guard to a small shop owner (proprietorship, not registered under GST).
    • The agency must charge GST @ 18% on the invoice and pay it under forward charge.

5. Exemptions

  • No blanket exemption for security services.
  • However, if services are provided to the Government, certain charitable trusts, or for specific exempted purposes, exemptions may apply.

✅ In summary:
Security services are taxable at 18% GST.

  • RCM applies if provided to a registered business entity (other than a proprietorship).

  • Forward charge applies in other cases.

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