Company receiving services from its directors and recipients of security services liable to pay service tax thereon – Security Services Defined

Notification No. 30/2012 ST dated 20.06.2012 specifying the services in respect of which service tax is to be paid under reverse charge has been amended to include the following services within its ambit:
a) Services provided by a director of a company to the said company and
b) Security services
Whole of the service tax will have to be paid by the company receiving the services of director while in case of security services, 75% of service tax will be paid by the service receiver and 25% will be paid by the service provider.
Consequential amendments have been made in rule 2(1)(d) of the Service Tax Rules, 1994 which defines person liable for paying service tax.
Further, “security services” has been defined as services relating to the security of any property, whether movable or  immovable, or of any person, in any manner and includes the services of investigation, detection or verification, of any fact or activity.

Security service has also been notified under reverse charge on which liability to pay service tax would be partly on service provider (25%) and partly on the service receiver(75%). This provision is applicable when service is provided by any individual, HUF, partnership firm or AOP to a business entity registered as body corporate. Now security service has specifically been defined whereby services of investigation, detection or verification are included.

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Service tax (third amendment) rules, 2012 – amendment in rule 2

Notification No. 46/2012-ST, dated 7-8-2012

In exercise of the powers conferred by sub-section (1) read with sub-section (2) of section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules further to amend the Service Tax Rules, 1994, namely:—

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1. (1) These rules may be called the Service Tax (Third Amendment) Rules, 2012.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Service Tax Rules, 1994, in rule 2, in sub-rule (1),-

(A)  in clause (d), in sub-clause (i),-

(i)  after the item (E), the following item shall be inserted, namely;-

“(EE) in relation to service provided or agreed to be provided by a director of a company to the said company, the recipient of such service;”;

(ii)  in the item (F), in the sub-item (b), after the words “manpower for any purpose”, the words “or security services” shall be inserted.

(B)  after clause (f), the following clause shall be inserted, namely:—

“(fa) “security services” means services relating to the security of any property, whether movable or immovable, or of any person, in any manner and includes the services of investigation, detection or verification, of any fact or activity;”

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Category : Service Tax (3286)
Type : Notifications (15272) Notifications/Circulars (30281)

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