The Gujarat Authority of Advance Ruling (AAR) ruled that the Gujarat Industrial Security Force Society to pay 18% GST on the entire amount received from their clients, including wages etc. to be paid to the Security Guards, establishment charges.
The applicant, M/s. Gujarat Industrial Security Force Society has submitted that there are more than 5000 security guards working under GISFS and to whom GISFS is giving employment opportunity; that GISFS is giving them salary as per Minimum Wages Act as prescribed by the authority from to time to time; that GISFS is giving its security services to almost 600 clients across Gujarat State and among them, mostly are of Government or semi government organization.
The applicant has sought the advance ruling on the two issues in respect of 18% GST only on establishment charges of Rs.12/-(i.e. after abatement of wages etc. paid to guards) and not on whole of Rs.112/- and whether GST credit can be availed if we follow the above method of charging GST.
The Coram consisting of Sanjay Saxena and Mohit Aggarwal said that The applicant M/s. Gujarat Industrial Security Force Society (GISFS) has to charge/pay 18% GST on the entire amount received by them from their clients, which includes the wages etc. to be paid to the Security Guards as well as the amount received from their clients as establishment charges to run their administration office and to cover their administration cost like administration staff salary, stationery, electricity of admin office etc. for the reasons discussed hereinabove.
The AAR further ruled that the applicant would be eligible to take the GST credit if they follow the aforementioned procedure of charging/paying GST subject to the fulfilment of the conditions/provisions envisaged in the relevant sections and rules of the CGST Act, 2017 and the CGST Rules, 2017 respectively.
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