This article will be beneficial in understanding the SAC code and GST on security services in India. Read below to understand the intricacies related to the services.
Security services, such as technical security services, personal security services, event management security services, etc., are crucial in every industry. Additionally, it makes careful to prevent crimes. From the GST rollout, 1 July 2017, to 31 December 2018, the service provider was responsible for paying GST on security services and SAC code.
What is the Nodal Authority to Have Introduced Such a Scheme?
The Indian GST Council has introduced the GST on security services. The Services Accounting Code, a system of services classification created by the previous service tax department for the imposition of service tax, was the foundation upon which the Council placed the GST on security services. There are five different GST rates for assistance: 0%, 5%, 12%, 18%, and 28%. Learn more in-depth Before talking about the GST on security services, you should know a few things about the GST. Enrollment in security services.
SAC Code: What Is It?
Servicing Accounting Code (SAC) is the abbreviation for the word. The SAC Codes are a system of service categorisation created by the service tax division in India. The GST Council has chosen to levy GST in India using the SAC code system. However, one must understand the intricacies related to the same to grasp the bigger picture.
What Does The GST SAC Code Mean?
Under GST law, SAC is the 6-digit SAC in GST. For instance, 998314 is the SAC for IT design and development services. These codes have been generated to distinctly categorise the services so that GST on such services could be easily calculated. Identifying the proper code will make the taxpayer understand the approximate amount of tax that must be payable.
- The first two digits of the SAC, 99, are the same for all services.
- In this instance, the middle two numerals (83) will stand for the main service category, IT services.
- The design and development services information will be shown in this number by the final two digits (14).
Application Requirements For SAC Codes
If you remain a responsible taxpayer, please note that you need to understand the payment procedure in detail. Learn the approach as mentioned below to understand better.
When completing the GSTR, service providers are required to utilize SAC codes. Among the services are hospitality, education, finance, and other things. Chapter 99 of the HSN module, which is dedicated to services, categorizes all services. The SAC code must appear on the GSTR forms. Below are the specifications for utilizing the SAC code while filing GSTR.
- A company with a turnover of less than Rs. 1.5 crores is exempt from needing a SAC code.
- SAC code is required for businesses with annual revenues of between Rs. 1.5 and five crores.
- If the dealer or business has a revenue of more than Rs. 5 Cr, the SAC codes must be specified.
Registering For GST On Security Services
Most companies providing security services would need to register since they would need to supply aid over state lines or have annual sales of more than Rs. 20 lakhs. Furthermore, it will be compulsory for all security service breadwinners with active service tax registrations to complete GST Registration and get GSTIN. Finally, the organization needs a security guard service license to provide security services in India.
Application Of SAC Code To Security Services And Investigations
The following SACs (Service Accounting Codes) have been created for the various security services offered in India. The process of getting various services codified can help you to gain a distinct advantage in terms of paying taxes as applicable. Clicking on the particular service that you intend to pay for can help you file the necessary application pertaining to GST. However, as a responsible business owner, you must pick up and click on the correct service to choose the right option. If you own diversified businesses, for each of the services being rendered, please ensure that you pay the necessary GST separately for each of the concerned services.
| Sr.No. | Service Accounting Code | Security Services |
| 1. | SAC – 998521 | Investigation services |
| 2. | SAC – 998522 | Security consulting services |
| 3. | SAC – 998523 | Security systems services |
| 4. | SAC – 998524 | Armoured car services |
| 5. | SAC – 998525 | Guard services |
| 6. | SAC – 998526 | Training of guard dogs |
| 7. | SAC – 998527 | Polygraph services |
| 8. | SAC – 998528 | Fingerprinting services |
| 9. | SAC – 998529 | Other security services |
Security Services Subject To GST In India
The SAC above codes falls under the 18% GST application category. That indicates that a flat rate of 18% will be applied to most services provided within India.
exempt from GST
- Security services provided to educational institutions in security, housekeeping, or cleaning, for example, are exempt in India, as are the following two types of security services.
- Security services are given for the personal or professional use of any individual or family associated with a foreign diplomatic mission or consular post in India.
GST On Security Services Beginning On Or After 1 January 2019
By Notification No. 29/2018 – Central Tax (Rate) dated 31 December 2018, several adjustments have been made to the GST provisions that apply to GST payments on Security Services.
The message informs the Security Service that the Reverse Charge Mechanism is operational. The reverse Charge Mechanism will no longer apply to the Security Service unless and until all of the conditions listed below are met. In other words, if all of the following conditions are met, the service provider is responsible for paying GST.
Service Specification: Security Service (services provided by way of supply of Security Personnel).
An individual who provides services but is not a corporate body.
Here, it’s crucial to understand the definition of “body corporate,” stated in Section 2(11) of the 2013 Companies Act. According to the report mentioned above, the following fall within the category of “body corporate”:
- A business
- Limited Liability Company
- Any business or corporation founded outside of India
- A registered individual residing in the taxable territory is a service recipient.
The Service Receiver is responsible for paying the GST if the requirements are met. The reverse Charge Mechanism will not apply in the following instances (i.e., in the cases below, GST is due by the Service Provider), according to the notification, which also lists the exceptions:
A department or other organisation of the Central, State, or Union territory; a local authority; or a government organisation that has obtained a GST registration only to comply with Section 51’s requirement for TDS payment. These individuals are registered taxpayers paying taxes under the composition scheme.
GST Exemption on Security Services
The GST Council grants some residents exemptions from Tax on security services; however, the following exemptions are only available upon the council’s reaffirmation of the certificate provided by the MEA.
In India, there are two different forms of GST exemptions for security services:
Educational Institutions: GST is not applied to security services provided to educational institutions of any kind. These services may take the form of housekeepers and cleaners, security personnel, etc.
Security services provided to anyone working in a foreign diplomatic mission or consular post for the advancement of the nation are provided by special agents.
Conclusion
Applying to pay GST as applicable to the services being rendered is a challenging job. With the help of this article, all queries about GST to be paid on security services have been explained to the target audience. If there is anything more you want to know, please feel free to contact us. We, at Vakilsearch, render convenient legal services and consultancies about some specific scopes of your business. The best option for you is to get in touch with the professionals deployed by us.
