38.6c New Delhi, India, Wednesday, May 29, 2024
Executive

Private Security agencies to sit on a dharna tomorrow over GST collection [ Read Memorandum]

By LawStreet News Network      17 July, 2018 12:00 AM      0 Comments
Private Security agencies to sit on a dharna tomorrow over GST collection [ Read Memorandum]

On Monday, July 16th, 2018 the Central Association of Private Security Industry (CAPSI) has decided to sit on a dharna on July 18, 2018 in front of the GST Commission of every state to press their demand for collection of Goods and Service Tax (GST) from the service receiver and not the service provider.

National Chairman of CAPSI Kumwar Vikram Singh has said that the collection of 18% GST on salaries of employees (security guards) from private security agencies had compelled 812 companies to shut down in the past one year, to highlight this issue about 5000 Managing Directors (MD) of private security agencies would sit on a dharna in various states on July 18.

A memorandum has been formed by CAPSI which will be submitted to the Chief Minister Jai Ram Thakur on the day of the dharna, requesting him to raise the matter in the meeting of GST council.

As per the memorandum, the current method of depositing GST is strangulating the industry due to the low margins and irregular cash flow. Most of the players operating the private security agencies are finding it extremely difficult to pay even wages on time & also to comply with the statutory requirements of depositing dues like PF, ESI, and GST etc.

Manpower and other statutory costs constitute approx. 90% of its billing and the operating margins only range from 5-10%. The TDS @ 2 % of the billing further erodes the margins immensely.

According to the present system the GST has to be deposited on 20th of the Month for which the bill is to be raised and presented to the client. However, the payment of these bills is received from the client after 60-90 days creating a huge impact on the cash flow of this low-profit margin industry.

Reportedly, there are 22,000 private security agencies in the country (about 100 in Himachal) mostly run by ex-servicemen, giving jobs to eight million people with a growth rate of 22 percent, if the present system continues it would not only lead to the closure of companies but would also increase unemployment.

The private security agencies have demanded that the GST for security services be made applicable on Reverse Charge Mechanism which implies that the GST should be paid by The Service Receiver (Taker).

Earlier, the government had extended the Service Tax Reverse Charge Mechanism to “The Manpower Supply Service and Securities Service” vide Ministry of Finance Notification No. 10/2014 dated July 11th, 2014 and Notification No. 18/2016 dated June 1st, 2016, though it was restricted to Individual/HUF/Partnership Firm, AOP/LLPs. and did not include Private Ltd. Companies.



Share this article:

User Avatar
About:


Leave a feedback about this
TRENDING NEWS

battle-over-butter-chicken-moti-mahal-takes-daryaganj-to-court-in-trademark-showdown
Trending Business
Battle Over Butter Chicken: Moti Mahal Takes Daryaganj to Court in Trademark Showdown

Moti Mahal and Daryaganj restaurants clash in Delhi High Court over trademark claims, each asserting they invented Butter Chicken and Dal Makhani.

28 May, 2024 11:33 AM
punjab-and-haryana-high-court-upholds-eds-arrest-of-aap-mla-dismisses-plea-challenging-detention
Trending Judiciary
Punjab and Haryana High Court Upholds ED's Arrest of AAP MLA, Dismisses Plea Challenging Detention [Read Order]

Punjab and Haryana High Court dismisses AAP MLA Jaswant Singh's plea against his ED arrest, ruling it was in line with Section 19(1) of the PMLA.

28 May, 2024 11:56 AM

TOP STORIES

no-legal-mandate-for-uploading-of-form-17c-on-website-or-handing-over-to-anyone-other-than-candidate-or-agent-ec-tells-sc
Trending Judiciary
No legal mandate for uploading of Form 17C on website or handing over to anyone other than candidate or agent, EC tells SC

EC tells SC there's no legal mandate to upload Form 17C on websites or provide it to anyone other than candidates or agents, citing risks of misuse and mistrust.

23 May, 2024 11:28 AM
national-security-always-paramount-sc-cancels-bail-of-pfi-members
Trending Judiciary
'National security always paramount,' SC cancels bail of PFI members [Read Judgment]

SC emphasizes national security, cancels bail of eight PFI members, stressing balance between civil liberties and counter-terrorism under UAPA.

23 May, 2024 12:05 PM
calcutta-hc-invalidates-five-lakh-obc-certificates-issued-after-2010-cites-unconstitutional-grounds
Trending Judiciary
Calcutta HC Invalidates Five Lakh OBC Certificates Issued After 2010, Cites Unconstitutional Grounds [Read Judgment]

Calcutta High Court invalidates OBC certificates issued after 2010, declaring them unconstitutional. Court cites undue haste and procedural impropriety.

23 May, 2024 03:33 PM
mp-high-court-grants-police-protection-to-couple-facing-honour-killing-threats-over-marriage
Trending Judiciary
MP High Court Grants Police Protection to Couple Facing Honour Killing Threats over Marriage [Read Order]

MP High Court grants police protection to a couple facing death threats from their parents for marrying without consent, citing serious measures against honor killings.

23 May, 2024 03:45 PM

ADVERTISEMENT


Join Group

Signup for Our Newsletter

Get Exclusive access to members only content by email