Security agencies threaten dharna over GST collection

Tribune News Service

Shimla, July 16

The Central Association of Private Security Industry (CAPSI) on Monday threatened to sit on a dharna in front of the GST commission in every state on July 18 to press their demand for collection of Goods and Service Tax (GST) from the service receiver and not the service provider.

About 5000 Mananging Directors (MD) of private security agencies would sit on a dharna in various states as collection of 18 per cent GST on salaries of employees (security guards) from private security agencies had compelled 812 companies to shut down in the past one year, said national chairman of CAPSI Kunwar Vikram Singh.

Addressing the media persons here, Singh said that manpower and statutory costs constituted 90 per cent of the billing and the operating margins were low ranging from 5- 10 per cent. Moreover, two per cent tax deducted at source (TDS) further dents the margin.

“We are paying salaries and other benefits like provident fund and employee state insurance to our employees on time every month even without even getting the basic wages of the guards for 2-3 months and it is virtually impossible to pay GST before 20th of every month as payments for security service is received after 60 or 90 days”, he added.

There are 22,000 private security agencies in the country (about 100 in Himachal) mostly run by ex-servicemen, giving jobs to eight million people with a growth rate of 22 per cent and this move would not only lead to closure of companies but would also increase unemployment 

as a large number of poor and semi literate rural youths would lose their jobs, he said.

A memorandum would be submitted to Chief Minister Jai Ram Thakur on July 18, requesting him to raise the matter in the meeting of GST council of which all the state are members, said Ghanshyam Pandit, president of Himachal chapter of CAPSI.