1. Definition :

"Security agency" is a commercial concern engaged in the business of rendering services relating to the security of any property, whether movable or immovable, or of any person, in any manner and includes the services of investigation, detection or verification, of any fact or activity, whether of a personal nature or otherwise. including the services of providing security personnel.

2. The value of the taxable service in case of services provided by security agencies.

Value of the taxable service in relation to the service provided by a security agency to a client, is the gross amount charged by such agency from the client for services rendered in connection with the security of any property or person, and includes services of investigation, detection or verification of any fact or activity including services of providing security personnel.

3. Exemption from payment of service tax for services provided by the security agency.

The services provided by the security agency in relation to the services of providing safe deposit lockers or safe vaults for security of movable property are exempted from payment of service tax.

4. Applicability on supply of manpower, other than security guards by the agencies.

The service of providing of above category of persons e.g. gardeners, cooks, sweepers, peons etc. by a security agency and on the payroll of security agency ,will not be liable to service tax under the category of security agency or detective agency.

5. Applicability on various amounts charged from the clients.

Normally the amount charged to the clients to whom security guards/personnel have been provided include salary of the employee (at least the minimum wage prescribed under the law), employer’s ESI and EPF contribution, income tax deduction at source, payment towards professional tax and labour welfare fund and other non-statutory charges such as bonus, leave uniforms, incidental expenses and other administrative and miscellaneous expenses. No abatement from the amount charged to the client for services rendered is available for purposes of computing the service tax liability. However, abatement in respect of statutory levies and taxes can be granted provided the same has some direct relation with the services rendered to the client and is hence specifically billed to the client and is reimbursable by the client on an actual basis. Statutory levies of the kind mentioned above, such as EPF, ESI, contribution towards labour welfare fund etc. are required to be borne by all types of employers and not only security agencies. Such statutory levies have no direct co-relation with the services rendered to the client (in as much as the same arise out of employer-employee relationship) and are not specifically relatable to the services rendered to the client. No abatement in respect of the such statutory levies is admissible for the purposes of computing the services tax liability.