CA Daily Study Update Group

The tax on security and maintenance services under GST is typically determined by whether those services fall under Reverse Charge Mechanism (RCM) or Forward Charge Mechanism (FCM), and depends on who is providing them and to whom they are supplied. GST Treatment for Security Services Security Services Provided by Registered Supplier: If a security agency (registered under GST) provides services to a business, tax is generally paid on a forward charge basis (FCM), i.e., the service provider charges GST and the recipient claims input tax credit. Security Services Provided to Registered Persons (RCM): If a partnership/LLP security agency provides services to a registered entity other than government or government entities, RCM applies. In this case, the recipient must pay GST directly. However, in most cases for companies, security services by an individual, HUF, partnership, or LLP to a registered recipient fall under RCM. GST Treatment for Maintenance Services Maintenance Services: These typically refer to facilities management, building maintenance, or general repair. If provided by a registered supplier, they are taxed under FCM (supplier collects/garners GST). RCM applies only in specified cases (e.g., supplies from unregistered supplier to business under certain circumstances before February 2019—now not generally applicable unless notified), and for government-related contracts.