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The applicant has to pay GST @ 18% on the entire amount received by them from their clients, which includes the 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.

Levy of GST— In the instant case, applicant GISFS is involved in providing the services of Security to many organisations. As per the submission of the applicant, 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 and they are charging GST @ 18% on Rs. 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. They have asked the following question seeking Advance Ruling on the same: (i) Our stand to charge the GST@18% only on establishment charges of Rs. 12/-(i.e. after abatement of wages etc. paid to guards) and not on whole of Rs. 112/-. (ii) Whether we can take the GST credit if we follow the above method of charging GST?” Held that— The applicant M/s. Gujarat industrial security force society (GISFS) has to charge/pay GST @ 18% on the entire amount received by them from their clients, which includes the 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. 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
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