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2021 (1) TMI 332 - AAR - GSTLevy of GST - whether the stand to charge the GST@18% only on establishment charges (i.e. after abatement of wages etc. paid to guards) and not on whole amount (which includes the wages etc. paid to the Security Guards as well as the amount collected from their client towards establishment charges for the administration of their office) is correct or otherwise? - availability of GST Credit - benefit of N/N. 11/2017-Central Tax(Rate) dated 28.06.2017. HELD THAT:- The Security services provided by the applicant falls under Heading 9985, Group 99852 and Service code(Tariff) 998529, wherein GST payable is 18%. Section 15(1) clearly stipulates that the value of supply of goods or services or both shall be the transaction value, which is the price actually paid or payable for the said supply of goods or services or both where the supplier and the recipient of the supply are not related and the price is the sole consideration for the supply. Further, sub-section (2) of Section 15 elaborates in detail, the items that are required to be included in the value of supply, whereas sub-section(3) of Section 15 specifically elaborates the items that are not to be included in the value of supply. Thus, it is very much apparent that all the aspects of valuation of supply have been covered in the CGST Act itself - taking into the view the definition of ‘consideration’ and the aspect of ‘valuation of supply’ as discussed above, it is apparent that the applicant is left with no option but to charge/pay GST on the entire amount received by them from their clients. It can be concluded that the applicant has to charge/pay GST @ 18% on the entire amount received by them from their clients, which includes the salary/wages etc. to be paid to the Security Guards as well as the amount received from their clients as establishment charges to run their administration office and to cover their administration cost like administration staff salary, stationery, electricity of admin office etc. Whether the applicant can take credit of GST, if they follow the method of charging/paying GST only on the amount received by them as establishment charges from their clients? - HELD THAT:- It is amply clear that the applicant cannot follow the method of charging/paying GST only on the amount received by them towards establishment charges from their client, since it would be contrary to the provisions of Section 15 of the CGST Act, 2017. In view of the above, we find that the applicant would be eligible to take the GST credit if they follow the procedure of charging/paying GST on the entire amount received by them from their clients, which includes the salary/wages etc./ to be paid to the Security Guards as well as the amount received from their clients as establishment charges to run their administration office and to cover their administration cost like administration staff salary, stationery, electricity of admin office etc., subject to the fulfilment of the conditions/provisions envisaged in the relevant sections and rules of the CGST Act, 2017 and the CGST Rules, 2017 respectively.
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