Section 65(105)(w) of the Finance Act, 1994 – Security Agency’s Services – Ad hoc exemption to security agency’s services provided during 16-10-1998 to 31-3-2009 by Central Industrial Security Force

AD HOC EXEMPTION ORDER No.1/1/2011, dated 1-7-2011

Whereas, the Central Industrial Security Force (CISF) constituted under the CISF Act, 1968 as a force for protection and security of industrial undertakings is a multi-skilled agency under Government of India, Ministry of Home Affairs. In addition to securing property belonging to Government of India, they also provide security service to several other properties including those owned by public sector companies and State Governments for a consideration.

And whereas, the security agency’s service provided by CISF is liable to service tax under section 65(105)(w) read with section 65(94) of the Finance Act, 1994;

And whereas, initially for a considerable period there was lack of clarity about the leviability of service tax on the security services provided by CISF for the reason that CISF is a Government agency, and also because the recipient of the said services are Public Sector Undertakings in which Government has a stake;

And whereas, after consultation with the Law Ministry it was decided that the services provided by CISF to Public Sector Undertakings and State Governments are liable for payment of service tax under the “Security Agency’s Service” and CISF thereafter started paying service tax with effect from 1-4-2009;

Due to the above reasons, CISF did not collect the service tax amount from the service recipients for the period upto 31-3-2009.

Now therefore, in exercise of the powers conferred by sub-section (2) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, on being satisfied that it is necessary in the public interest to do so, hereby exempts the taxable service provided, to any person by Central Industrial Security Force in relation to ‘Security Agency’s service’ falling under sub-clause (w) of clause (105) of section 65 of Finance Act, 1994, during the period 16-10-1998 to 31-3-2009 from the whole of the service tax leviable thereon under section 66 of the Finance Act, 1994.

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