Under Negative List regime, scope of Reverse Charge Mechanism (RCM) has been widened vide Notification No. 30/2012-S.T. so as to, interalia, includes support services provided by Government. Now question arises about applicability of RCM in respect of security services provided by CISF.
CISF is constituted and maintained by the Central Government an armed Force of the Union to be called Central Industrial Security Force for the better protection and security of Industrial undertakings owned by that Government, joint venture or private industrial undertaking and to perform such other duties as may be entrusted to it by the Central Government.
As per sub-clause (E) of Rule 2(1) (d) Service Tax Rules, 1994 “the recipient of service is liable for paying service tax under reverse charge, when the “Support Service” provided or agreed to be provided by Government or Local Authority to any business entity located in taxable territory”.
Further the definition of “Support Service” provided under Section 65B (49) of the Finance Act, 1994 specifically covers “Security Service”.
Therefore, in case of Security Services (Support Service) provided by CISF, recipient of service is liable for paying service tax @12.36% on 100% service value under reverse charge, and the CISF will not liable to charge the service tax on their invoices.
