TMI Blog2021 (1) TMI 332X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... curity services to almost 600 clients across Gujarat State and among them, mostly are of Government or semi government organization. 3. The applicant has submitted that with regard to current situation of GISFS for charging GST to the client, they are providing security to their clients for which they are charging the amount which they are paying to the guards as per Minimum Wages Act plus 12% as establishment charges to run their administration office and to cover their administration cost like administration staff salary, stationery, electricity of admin office etc; that out of 112%, 100% they are paying to their guards as wages and remaining 12% is utilized to recover their administration office cost; that basically, they are left with nothing and by chance they have surplus then it will be utilized for capital expenditure of society like purchase of uniform, shoes etc. for security guards; that they are charging GST @ 18% on ₹ 112/-(100 + 12% establishment charges) and collect the same from their client and they are paying GST to the Government in the same way since the incorporation of GST. 4. The applicant has further submitted that they came across a few judg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at: We, accordingly, hold that the appellant is entitled for the abatement towards the payment made on account of contribution towards ESL, EPF and PF and also through wages and salaries while computing the assessable value in terms of Section 67 of the Act for the payment of service tax. 6. The applicant vide their additional submission given vide email dated 24.09.2020 has cited the following judgements in support of their claim that reimbursable expenses are not to be added/abated to/in the assessable value of GST for charging GST on Security Guard Services and submitted scanned copies of the same: (i) Final Order No.71115/2016, dated 2-12-2016 in Appeal No. ST/70025/2015-CU(DB) and Cross Objection No. ST/CROSS/70318/2016 by CESTAT, Regional Bench, Allahabad in the case of CCE ST Agra V/s Antz Management Consultancy Pvt Ltd. = 2016 (12) TMI 1698 - CESTAT ALLAHABAD (ii) Judgement of the High Court of Delhi dated 30.11.2012 in the case of Intercontinental Consultants Technocrats Pvt Ltd V/s Union of India. = 2012 (12) TMI 150 - DELHI HIGH COURT (iii) Judgement dated 07.03.2018 of the Supreme Court of India in the case of Union of India v/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... guards as per Minimum Wages Act plus 12% as establishment charges to run their administration office and to cover their administration cost like administration staff salary, stationery, electricity of admin office etc and they are charging GST @ 18% on ₹ 112/-(100 + 12% establishment charges) which they collect from their client and are paying GST to the Government in the same way since the incorporation of GST. The applicant has stated that they have come across a few judgements in similar cases wherein the authorities have decided to charge the taxes after abatement towards payment made on account of wages, salaries, contribution made towards PF, ESIC etc i.e. to charge the taxes after deduction of wages etc. paid to security guards and in their case GST @18% can be charged on establishment charges of ₹ 12 only and not on whole amount of ₹ 112/-. The applicant has referred to a few case laws to support their contention as enlisted at para-6 above. They have asked the following question seeking Advance Ruling on the same: We hereby want your opinion about following things: (i) Our stand to charge the GST@18% only on establishment charges of ₹ 12/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes that it is inclusive of charges of accommodation and transportation required for such a tour and the amount charged in the bill is the gross amount charged for such a tour including the charges of accommodation and transportation required for such a tour. (ii) Support services other than (i) above 9 ---- As per Annexure to Notification No.11/2017-Central Tax(Rate) dated 28.06.2017, the same appears at Sr.No.419 and reads as under: Sl.No. Chapter, Section, Heading or Group Service Code (Tariff) Description of Service Heading 9985 Support services 410 Group 99952 Investigation and security services. 411 998521 Investigation services 412 998522 Security ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 011, dated 8-8-2011 in Appeal No. ST/111/2008 by the CESTAT Sub zonal Bench, Bangalore in the case of Sri Bhagvathy Traders V/s CCE Cochin. = 2011 (8) TMI 430 - CESTAT, BANGALORE (vii) Final Order No. A/31540/2018, dated 25-10-2018 in Appeal No. ST/1862/2010 by the CESTAT, Regional Bench, Hyderabad in the case of Karvy Consultants V/s CCE ST Hyderabad II = 2019 (2) TMI 763 - CESTAT HYDERABAD 13. On going through the aforementioned judgements, we find that the issues discussed in all of them are with respect to the aspect of valuation and pertain to the pre-GST era i.e. when Service Tax was chargeable on services provided, under the Finance Act, 1994. Further, in one of the judgements relied upon by the applicant which pertains to judgement of the Hon ble Supreme Court of India in the case of Union of India Anr. v/s. M/s. Intercontinental Consultants and Technocrats pvt.ltd (Civil Appeal No.2013 of 2014) = 2015 (2) TMI 593 - SC ORDER (mentioned at Sr.No. iii above), it is observed that the said case law pertains to the period prior to 14th May, 2015, when the legislative amendments were not brought out in the Finance Act, 1994. Further, we also find that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made, whether in money or otherwise, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government. It also includes the monetary value of any act or forbearance, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government. In the instant case, the applicant themselves have explained that out of an amount of ₹ 112/- charged from the clients, ₹ 100/- is paid as salary to the Security Guard and the remaining ₹ 12/- are establishment charges to run their administration office and to cover their administration cost like administration staff salary, stationery, electricity of admin office etc. and that they are charging 18% GST on the total amount of ₹ 112/-. However, they have also stated that based on the various judgements, they have referred to in their application, they intend to charge GST @18% only on the establishme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discount has been duly recorded in the invoice issued in respect of such supply; and (b) after the supply has been effected, if- (i) such discount is established in terms of an agreement entered into at or before the time of such supply and specifically linked to relevant invoices; and (ii) input tax credit as is attributable to the discount on the basis of document issued by the supplier has been reversed by the recipient of the supply. (4) Where the value of the supply of goods or services or both cannot be determined under sub-section (1), the same shall be determined in such manner as may be prescribed. (5) Notwithstanding anything contained in sub-section (1) or sub-section (4), the value of such supplies as may be notified by the Government on the recommendations of the Council shall be determined in such manner as may be prescribed. Explanation .-For the purposes of this Act, (a) persons shall be deemed to be related persons if (i) such persons are officers or directors of one another s businesses; (ii) such persons are legally recognised partners in business; (iii) such persons are employer and employee; (iv) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 19. In the light of the foregoing, we rule as under: RULING Question-1: We hereby want your opinion about our stand to charge the GST@18% only on establishment charges of ₹ 12/-(i.e. after abatement of wages etc. paid to guards) and not on whole of ₹ 112/-? A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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