The Authority of Advance Rulings (AAR) in Haryana has said that Security Services provided by a Limited Liability Partnership shall not be treated as taxable under Reverse Charge Mechanism (RCM).
Under the Goods and Services Tax(GST) Act, 2017 the petitioner has been registered and asked for the ruling as a Limited Liability Partnership that has been involved in furnishing security services to other businesses. Under Section 97(2) of the Central Goods and Services Tax Act (CGST Act), 2017, the petitioner AS & D Enterprise LLP sought an Advance Ruling at the Haryana AAR.
The security services furnished via the Limited Liability Partnership (LLP) are via security personnel for surveillance and security to assets/installations/offices/buildings/properties/equipment and others at the locations as might be asked via the recipient companies.
The applicant, under Section section 2(98) of CGST Act, “reverse charge” directed that the obligation to file the tax via recipient of supply of goods or services or both rather than the supplier of these goods or services or both sub-section (3) or sub-section (4) of Section 9, or under subsection (3) or sub-section (4) of section 5 of Integrated Goods and Services Tax Act, beneath Reverse Charge mechanism, the responsibility to furnished the tax would be set on the recipient of the supply of goods or services rather than the supplier for the shown types of goods or services.
Practicing the powers given to the central government vide Notification No. 13/2017-Central Tax Rate dated 28.06.2017 amended by Notification No. 29/2018 – dated 31.12.2018, via the insertion of Sr. No. 14, reported that Security services (services provided by way of supply of security personnel) furnished to the enrolled individual other than the corporate would be taxable with 18% on the grounds of the Reverse Charge Mechanism.
AAR sees that from the LLP Act, 2008, the features including others are that the LLP would be the body corporate and the legal entity separate from its partners.
The Authority comprises Mr. Sunder Lal and Mr. Kumud Singh held that on the grounds of the clarification that LLP would be the body corporate, the Reverse Charge Mechanism does not apply for the current case, and tax would get furnished on the forward charge basis via the supplier(AS & D Enterprise LLP).
