No service tax is chargeable under security agency services, the Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled.
Only due to the police charging a fee, it shall not become “a person committed in the business of furnishing the security” and, hence, no service tax can be charged, the bench of Justice Dilip Gupta (President) and P. V. Subba Rao (Technical Member) observed.
The Superintendent of Police at the SP Office has contested the ruling made by the Commissioner (Appeals). This commissioner affirmed the decision made by the Additional Commissioner regarding the service tax demand, and interest recovery under Section 75 of the Finance Act, 1994, and also referred the case back for reviewing the penalties imposed under Sections 76, 77, and 78 of the Finance Act.
The matter in question was whether the imposition of security charges for supplying police guards to banks for security purposes would attract service tax under the classification of “security agency services.”
The tribunal referenced a prior ruling by the CESTAT involving the Superintendent of Police, Swai Madhopur, versus the Commissioner of Central Excise, Jaipur. In that case, it was established that the police render security as part of their mandated duties.
Relevance:- CESTAT: No Penalty If Pending Taxes Paid Earlier to the Issuance of Show Cause Notice
While they typically don’t charge for this service, in some instances, they levy a fee set by the state government. Charging a fee does not automatically classify the police as “individuals involved in the security provision business.”
| Case Title | Superintendent of Police Versus Commissioner of Central Goods and Service Tax, Excise and Customs – Indore |
| Case No. | Service Tax Appeal No.50390 of 2017 |
| Date | 12.12.2023 |
| Counsel For Appellant | None |
| Counsel For Respondent | Harshvardhan |
| CESTAT New Delhi Principal Bench Order | Read Order |
