Private security agencies claim GST on commission, not gross income

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The country’s private security agencies have reiterated their demand for the application of the 5% GST on their gross income or, failing that, the 18% GST applicable on their agency commission only.

“Private security agencies are under financial constraints [due to] GST collected on the gross amount invoiced to a customer [the principal employer] which includes reimbursement of salaries and statutory benefits paid to security guards, ”the Security Association of India (SAI) said in a recent letter to the government.

“The pleas do not work”

“From the beginning, we have indicated that the salaries and benefits paid to security guards should be excluded from the value for the calculation of the amount of the tax on services and that the tax should only be levied on the total value of the commissions. / agency fees received by the security agency, ”SAI said in a representation to the Union Minister of Finance.

The association said all of its previous pleas had failed.

The sector’s umbrella organization, the Central Association of the Private Security Industry (CAPSI) has called for a nationwide protest to pressure its demands.

At a meeting in Mumbai, CAPSI and SAI expressed fears that the 18% GST would force many actors to shut down their businesses and put thousands of guards out of work.

To highlight their cause, CAPSI President Viswanath Katti said security agencies will demonstrate at GST offices across the country on July 18, 2018, and a memorandum will be submitted to GST commissioners.

Council invited to reflect

SAI Chairman Gurcharan Singh Chauhan said Maharashtra Finance Minister Sudhir Mungantiwar had been approached and invited to discuss the matter at the GST Council meeting.

He said the sector was helping to employ the rural poor and that many of the estimated 70 lakh guards would be laid off as the cost of wages rose.

They said GST should be levied on 10% of the agency’s 2,034 service charge, which will result in GST of 366 per month per security guard.

“The security guard who receives the lowest monthly salary of 10,000 yen is taxed 4,028 yen per month, which is very high and unfair to his monthly salary,” the letter said.


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