| Q.1 |
What is a Security
Agency? |
Ans.
|
"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. |
| Q.2 |
What is the taxable
service in case of Security agencies? |
| Ans. |
Taxable service is a
service provided to a client, by a security agency in relation
to the security of any property or person, by providing security
personnel or otherwise and includes the provision of services
of investigation, detection or verification of any fact or activity.
The ambit of the term security agency is wide enough to include
not only agencies rendering services of providing security but
also detective agencies, which are providing confidential services
in respect of say, financial credibility of any person, trade
mark/ copyright infringements etc. |
| Q.3 |
What is the value
of the taxable service in case of services provided by Security
Agencies? |
| Ans |
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. |
| Q.4 |
Is service tax leviable
on the entire amount charged to the clients to whom security
guards/ personnel have been provided? In many cases, the bulk
of the charges represent salary to the employee( at least the
minimum wages 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. Is Service
Tax leviable even on such charges ? |
| Ans |
Yes. No abatement from
the amount charged to the client for services rendered is available
for purposes of computing the service tax liability. Statutory
levies of the kind like EPF, ESI contribution towards labour
welfare fund etc. are required to be borne by all types of employers
and not only security agency. 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. Therefore, no abatement in respect of the such
statutory levies is admissible for the purposes of computing
the service tax liability. |
| Q.5 |
Are any services
provided by the Security Agency exempted from payment of Service
tax? |
| Ans.
|
Yes, 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. |
| Q.6 |
When a Private Security
Service also provides labour or manpower for activities not
related to security services, whether such service is liable
to service tax ? |
| Ans. |
The Security Agency
merely supplying labour and manpower for any purposes other
than providing security services is not liable for service tax
since it does not fall under the category of security service,
which is irrespective of the fact that they may get covered
as manpower recruitment agencies. |
| Q.7 |
The Security Agencies,
sometimes during the course of their business, undertake services
of collection of dues from loanees, credit card holders, etc.
Are these services liable for Service Tax ? |
| Ans. |
Taxable services rendered
by the scope of security agency is restricted to a service provided
in relation to the security of any property or person. The activities
of collection of dues, etc. do not fall in the ambit of providing
security to any property or person. Therefore, these activities
are not covered by the levy of Service Tax. |
