Page 8 - Chap2 RCM

i) he has taken registration under the GST law.
ii) He has filed a declaration, in the prescribed form,
Ø that he exercises the option to pay tax on the said service under forward charge &
Ø to comply with all the provisions of GST law as they apply to a person liable for paying the tax for
supply of any goods &/or services &
Ø that he shall not withdraw the said option within a period of 1 year from the date of exercising such
option.
iii) He makes a declaration on the invoice issued by him in prescribed form to the publisher.

Services of Supplying Security Personnel:-

Q.7: The Professionals Security-Pune is a firm of security agency providing services by way of supply of
security personnel to following categories of persons:-
i) XYZ Pvt. Ltd. (a company registered under CGST Act, 2017 in Pune), valuing ₹ 10 lakhs.
ii) Sindh Co-operative Credit Society, Mumbai, which is unregistered under CGST Act, 2017, ₹ 8 lakhs.
iii) Department of Central Government located at Bangalore which has taken registration under CGST
Act, 2017 only for the purpose of deducting tax u/s 51 and not for making any taxable supply of goods or
services, valuing ₹ 12 lakhs.
iv) Pune Municipal Corporation registered under CGST Act, 2017 for the purpose of making taxable
supply of goods or services. The value of service provided was ₹ 4 lakhs.
v) Mr. Altaf, from Gujarat (registered under section 10 of CGST Act, 2017), value of ₹ 2 lakhs.
vi) Service provided to Star Industries Ltd., USA, value being ₹ 7 lakhs.
Determine the taxable value as well as the tax liability of The Professionals Security-Pune, assuming CGST
@ 9%, SGST @ 9% and IGST @ 18%.
Answer:- Determination of taxable value of the Professionals Security-Pune:-

S. Recipient of services Taxable under Taxable Refer

No. Value (`) Note
i) XYZ Pvt. Ltd. (Registered person) Reverse Charge - 1
ii) Sindh Co-operative Credit Society (Un-registered person) Forward Charge 8 Lakh 1
iii) Department of Central Government, Bangalore (Registered Forward Charge 12 Lakh 2
only to deduct TDS & not to make taxable supply)
iv) Municipal Corporation (Registered to make taxable Supply) Reverse Charge - 3

v) Mr. Altaf, Gujarat (Registered u/s 10 of CGST Act) Forward Charge 2 Lakh 2
vi) Star Industries Ltd., USA Forward Charge 7 Lakh 4
Total Taxable Value 29 Lakhs

Notes:-
1. As per section 9(3) of CGST Act, 2017, If security services (services provided by way of supply of security
personnel) are provided by any person other than a body corporate to a registered person located in the
taxable territory, then GST is payable on reverse charge basis by recipient.
2. The following are the exceptions to the service covered under reverse charge in note 1 above:-
(i) Ø Department or Establishment of the CG, SG or UT or
Ø Local authority or
Ø Governmental agencies,
which has taken registration under the CGST Act only for the purpose of deducting tax u/s 51 and not
for making a taxable supply of goods or services.
(ii) a registered person paying tax under section 10 of the said Act i.e. composition scheme.
3. Pune municipal corporation is a local authority registered under CGST Act for making taxable supply. It is not
getting covered under exception in note 2 & thus, reverse charge is applicable.
4. RCM will apply only if service provided to registered person located in taxable territory. As Star Industries is
located in USA which falls outside the taxable territory, The Professionals Security- Pune will be liable

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