Point to be noted for above notification

It is applicable from 1st January 2019. It means if a person other than body corporate is starting the business of supplying security services to only body corporate w.e.f.1st January 2019, not required to get registered under GST.It is only for security services (i.e. services provided by way of supply of security personnel) and not for manpower supply services. In service tax regime, both security services and manpower supply services were covered under RCM. In GST regime, Manpower supply service is still under forward charge mechanism.A service provider must be other thana body corporate only for qualifying this notification. If a service provideris a body corporate then RCM clause will not apply. It will fall under the forward charge mechanism.

As per the notification, Following are not liable for RCM on security services, (i) (a) a Department or Establishment of the Central Government or State Government or Union territory; or(b) local authority; or(c) Governmental agencies; which has taken registration under the Central Goods and Services Tax Act, 2017 (12 of 2017) only for the purpose of deducting tax under section 51 of the said Act and not for making a taxable supply of goods or – (ii) a registered person paying tax under section 10 of the said Act. i.e. a composition dealer. For determination of “Time of supply of Service”, Section 13(1) [forward charge] of CGST act is applicable till 31st December 2018 subject to fulfilment of condition prescribed and section 13(2) [Reverse charge] of CGST act is applicable from 01st January 2019. This can be summarised in the following table for easy understanding,

  1. Service supplied before 1st January 2019 (Transitional Phase)
  2. Service supplied from 1st January 2019 before 1st January 2019

Supply of security services to SEZ unit or Developer is always treated as a zero rated supply. No question of RCM applicability will arise.HSN/SAC code for security services is 9985 and applicable tax rate is 18%.ITC is available for payment made under RCM for security services.In invoice, whether RCM is applicable? It is yes if aforesaid condition fulfilled.