Security guard and agency services attract 18% GST under SAC 998525. If the provider is a body corporate (Pvt Ltd, Public Ltd, OPC or LLP), it charges 18% under forward charge. If the provider is any person other than a body corporate (proprietor, firm, individual) and the recipient is a registered person, the recipient pays the 18% under Reverse Charge (RCM). Either way, the business recipient can claim full ITC.
GST on Security Services — Decision Table
Every common security-service scenario, with the SAC/HSN code, who deposits the GST and whether Input Tax Credit is available.
| Scenario | SAC / HSN | GST Rate | Who Pays | ITC |
|---|---|---|---|---|
| Security supplied by body corporate (Pvt Ltd / LLP) | 998525 | 18% | Agency (forward charge) | Yes |
| Security by proprietor / firm → registered recipient | 998525 | 18% | Recipient (RCM) | Yes |
| Security by proprietor / firm → composition / unregistered | 998525 | 18% | Supplier (forward, if registered) | No |
| Guards hired directly on payroll (employees) | — | Nil | — | — |
| CCTV cameras / surveillance equipment | 8525 | 18% | Supplier (goods) | Yes |
| Alarm / fire-detection systems | 8531 | 18% | Supplier (goods) | Yes |
| AMC / maintenance of security systems | 998719 | 18% | Supplier (forward charge) | Yes |
SAC 998525 = investigation & security services. Rate unchanged by GST 2.0 (22 Sep 2025), which restructured goods slabs, not security services. Confirm on the official GST portal before invoicing.
Forward Charge or Reverse Charge?
One factor decides who deposits the 18%: whether the security provider is a "body corporate". A body corporate is a company (Pvt Ltd, Public Ltd, OPC) or an LLP. Proprietorships, partnership firms, HUFs and individuals are not body corporates.
Forward charge — agency pays
- Provider is a body corporate (Pvt Ltd, Public Ltd, OPC, LLP)
- Agency charges 18% on its invoice
- Agency collects & deposits the tax
- Recipient claims ITC from the invoice
- Also applies to any provider billing an unregistered / composition recipient
Reverse charge — recipient pays
- Provider is NOT a body corporate (proprietor / firm / individual)
- Recipient is a registered person
- Recipient self-pays 18% in cash (GSTR-3B 3.1(d))
- Supplier invoices without GST
- Recipient then claims that 18% as ITC
RCM liability on security services must be discharged through the electronic cash ledger; you cannot use your existing ITC balance to pay it. You then claim that same amount as ITC (usually the same period), so it is cash-flow timing rather than a permanent cost — provided the credit is otherwise eligible.
Not sure if your security bill should carry GST or attract RCM?
Get My GST Position →When RCM Applies to Security Services
RCM on security services was inserted into Notification 13/2017-Central Tax (Rate) under Section 9(3) of the CGST Act, effective 1 January 2019. It applies only when all of these are true:
- The supply is security services (supply of security personnel)
- The supplier is any person other than a body corporate
- The recipient is a registered person
- The recipient is located in the taxable territory
RCM does not apply when the supplier is itself a body corporate, when the recipient is registered only for TDS under Section 51, or when the recipient is a composition taxpayer. In those cases the supplier charges GST under forward charge (if registered).
RCM applies — recipient pays
- Provider is a proprietor, firm or individual
- You (recipient) are a registered regular taxpayer
- Provider bills you without GST
- You self-pay 18% and claim ITC
RCM does not apply
- Provider is a Pvt Ltd / Public Ltd / OPC / LLP
- You are a composition taxpayer
- You are registered only for TDS (Sec 51)
- You are unregistered
Want your security invoices & RCM entries reconciled with your returns?
Talk to a GST Expert →ITC on Security Services — When Can You Claim?
Security services are eligible input services under Section 16 and are not blocked under Section 17(5). Businesses — factories, offices, malls, hospitals, hotels — can claim full ITC on security expenses used for business.
- You hold a valid tax invoice (or self-invoice under RCM) in your GSTIN's name.
- The credit appears in your GSTR-2B and the supplier has reported the supply (for forward-charge invoices).
- Payment to the supplier is made within 180 days (not applicable to RCM tax paid in cash).
- The service is used for business — not for personal or residential security.
The most common security-services error is mis-classifying the RCM. A registered business that hires guards from a proprietor or partnership firm must self-pay 18% under RCM even though the agency's bill shows no GST — miss it and you face interest plus a lost credit. Always check the provider's constitution (body corporate or not) before booking the invoice.
GST on CCTV, Alarms & AMCs
Physical security equipment follows product HSN rates, all at 18%: CCTV / surveillance apparatus (HSN 8525), alarm and fire-detection systems (HSN 8531). Installation and annual maintenance contracts (AMC) are services taxed at 18%. A bundled contract of guards + CCTV + monitoring is a composite supply taxed at the rate of the principal supply — usually 18%.
Payroll cost of guards employed directly by you is outside GST — employment is excluded from "supply" under Schedule III of the CGST Act. Only outsourced security through an agency or contractor carries GST.
Frequently Asked Questions
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